1
00:00:00,120 --> 00:00:02,600
Speaker 1: Welcome to How the Money. I'm Joel, I'm Matt, and

2
00:00:02,680 --> 00:00:24,360
Speaker 1: today we're answering your listener questions. You know what, man,

3
00:00:24,440 --> 00:00:26,800
Speaker 1: We've got five listener questions to get to this week.

4
00:00:26,840 --> 00:00:30,160
Speaker 1: We've got a question about our car buying philosophy. We're

5
00:00:30,200 --> 00:00:32,479
Speaker 1: gonna talk about whether it makes sense to buy new,

6
00:00:32,600 --> 00:00:36,839
Speaker 1: buy used, even lease. I think you can tell by

7
00:00:36,840 --> 00:00:39,440
Speaker 1: my inflection there that that is not something that we're

8
00:00:39,440 --> 00:00:41,800
Speaker 1: gonna recommend, but you just gotta stick around to find out.

9
00:00:42,200 --> 00:00:44,720
Speaker 1: We are also going to talk about budgeting on a

10
00:00:44,800 --> 00:00:47,600
Speaker 1: variable income. That's something I've been doing now for like

11
00:00:47,680 --> 00:00:51,199
Speaker 1: fifteen years. And another listener he is building out a

12
00:00:51,280 --> 00:00:54,160
Speaker 1: space to Airbnb and he was asking for some tips.

13
00:00:54,200 --> 00:00:57,720
Speaker 1: So I'm looking forward to answering those three questions plus

14
00:00:57,720 --> 00:00:59,880
Speaker 1: a few others. But real quick before we get to

15
00:00:59,880 --> 00:01:03,000
Speaker 1: all that, dude, I uh, just before we hit record,

16
00:01:03,400 --> 00:01:07,039
Speaker 1: I scored a sweet curb alert. Do you have any

17
00:01:07,080 --> 00:01:10,000
Speaker 1: guesses as to what I happened to come across. I

18
00:01:10,040 --> 00:01:12,080
Speaker 1: would have passed the pony up because there are additional

19
00:01:12,120 --> 00:01:16,400
Speaker 1: costs associated Honestly, there's additional costs associated with anything pretty

20
00:01:16,480 --> 00:01:20,880
Speaker 1: much that you pick up. One more, Okay, a camping trailer.

21
00:01:21,280 --> 00:01:24,240
Speaker 1: Oh that would that'd be pretty like an air stream.

22
00:01:24,319 --> 00:01:26,600
Speaker 1: It's maybe it's dirty. Yeah, I was thinking about one

23
00:01:26,640 --> 00:01:28,280
Speaker 1: of those like collapsed on ones. No one's giving away

24
00:01:28,280 --> 00:01:30,160
Speaker 1: an air street. Yeah, like you're talking about the ones

25
00:01:30,200 --> 00:01:31,840
Speaker 1: that that are flat and then they put up when

26
00:01:31,880 --> 00:01:34,080
Speaker 1: she gets to the place. I would consider picking one

27
00:01:34,080 --> 00:01:37,160
Speaker 1: of those up, assuming I had a trailer hitch on

28
00:01:37,160 --> 00:01:39,759
Speaker 1: the van or whatever. No. I picked up a ten

29
00:01:39,840 --> 00:01:43,880
Speaker 1: foot long green slide, like a playground slide for the

30
00:01:43,920 --> 00:01:46,560
Speaker 1: kids to to go down. This is something that Kate

31
00:01:46,600 --> 00:01:48,520
Speaker 1: and I had talked about getting for a while to

32
00:01:48,640 --> 00:01:50,760
Speaker 1: add on to the playhouse at our old house. But

33
00:01:50,800 --> 00:01:52,760
Speaker 1: even here at the new place, there is space for

34
00:01:52,840 --> 00:01:54,720
Speaker 1: us to kind of create a little platform there amongst

35
00:01:54,760 --> 00:01:57,280
Speaker 1: the trees, uh, to kind of both that to a

36
00:01:57,320 --> 00:01:59,840
Speaker 1: little platform how the kids slide down that thing. But

37
00:02:00,040 --> 00:02:01,440
Speaker 1: of the reasons though that we had ever gotten one

38
00:02:01,480 --> 00:02:03,720
Speaker 1: of those? Is there expensive? These things cost between like

39
00:02:03,800 --> 00:02:05,800
Speaker 1: three hundred bucks. I think the one I looked it up,

40
00:02:05,800 --> 00:02:08,000
Speaker 1: The one that I picked up was a four slide.

41
00:02:08,320 --> 00:02:10,680
Speaker 1: That's not counting shipping. And all I need to do

42
00:02:10,760 --> 00:02:12,840
Speaker 1: is just pull up the pressure washer baby blast that

43
00:02:12,919 --> 00:02:14,880
Speaker 1: thing off. Bolted to some two by fours and we're

44
00:02:14,919 --> 00:02:18,560
Speaker 1: good to go. Uh And so I am extremely happy

45
00:02:18,720 --> 00:02:20,960
Speaker 1: with my find this afternoon. Man, it just goes to

46
00:02:20,960 --> 00:02:23,280
Speaker 1: show you that one person's trash is another person I

47
00:02:23,280 --> 00:02:25,120
Speaker 1: don't know. Well, they knew it was somebody else's treasure

48
00:02:25,120 --> 00:02:27,280
Speaker 1: because they had it propped up. One end of it

49
00:02:27,320 --> 00:02:29,560
Speaker 1: was sitting on top of the fire hydrant. They knew

50
00:02:29,600 --> 00:02:30,920
Speaker 1: that somebody was going to see that throw it in

51
00:02:30,919 --> 00:02:32,880
Speaker 1: the back of their van, which it didn't even fit

52
00:02:32,880 --> 00:02:34,440
Speaker 1: in the van, like half of it was sticking out

53
00:02:35,400 --> 00:02:37,160
Speaker 1: in order for me to get that thing home. But

54
00:02:37,200 --> 00:02:38,600
Speaker 1: I wanted to mention that as well. I was just

55
00:02:38,639 --> 00:02:41,240
Speaker 1: so surprised as we were moving out of our house

56
00:02:41,240 --> 00:02:42,760
Speaker 1: and trying to unload a bunch of stuff. There's a

57
00:02:42,760 --> 00:02:45,480
Speaker 1: lot of stuff that you don't sell on Facebook market place,

58
00:02:45,520 --> 00:02:46,799
Speaker 1: but you also don't want to throw it away. It

59
00:02:46,840 --> 00:02:48,639
Speaker 1: kind of falls in that no man's land where it's

60
00:02:48,680 --> 00:02:51,320
Speaker 1: not worth selling, but you just feel wasteful were you

61
00:02:51,400 --> 00:02:54,200
Speaker 1: to throw it away. And we put so much stuff

62
00:02:54,240 --> 00:02:56,280
Speaker 1: out on the street, and you would have been shocked

63
00:02:56,639 --> 00:02:58,799
Speaker 1: at the I mean just the vast quantity of stuff

64
00:02:58,800 --> 00:03:00,320
Speaker 1: a that we put out there, but just the different

65
00:03:00,320 --> 00:03:03,119
Speaker 1: things that people I saw the potential in as well,

66
00:03:03,200 --> 00:03:05,160
Speaker 1: and so it makes me realize that that I'm not

67
00:03:05,200 --> 00:03:08,359
Speaker 1: alone with my CERB alert hunting. Yeah, I'm always amazing.

68
00:03:08,360 --> 00:03:11,440
Speaker 1: Like in our even our Facebook by Nothing group, the

69
00:03:11,440 --> 00:03:13,600
Speaker 1: things that people post on there and that like ten

70
00:03:13,639 --> 00:03:16,639
Speaker 1: people immediately stick their digital hand up and they're like, no, me,

71
00:03:16,720 --> 00:03:18,760
Speaker 1: maybe I'll like it, and I'm like, what, I would

72
00:03:18,760 --> 00:03:20,160
Speaker 1: never want that, But then every once in a while

73
00:03:20,200 --> 00:03:23,480
Speaker 1: I'm like, oh, yeah, I want that, and so I guess, Yeah,

74
00:03:23,520 --> 00:03:28,240
Speaker 1: everyone's got got different metrics by which they judge value exactly. Yeah.

75
00:03:28,320 --> 00:03:30,799
Speaker 1: If congratulations on your new slide, Thank you, dude. I'm

76
00:03:30,840 --> 00:03:33,960
Speaker 1: so I know you're you're probably like it seems totally lame, dude. No,

77
00:03:34,120 --> 00:03:36,320
Speaker 1: your kids will enjoy it. I'm super pumped. Your kids

78
00:03:36,360 --> 00:03:38,080
Speaker 1: are gonna play on it as well when they come over,

79
00:03:38,440 --> 00:03:40,360
Speaker 1: And if I can get it up anytime soon, I

80
00:03:40,400 --> 00:03:43,000
Speaker 1: will definitely snap a pixe to share with our listeners.

81
00:03:43,040 --> 00:03:44,600
Speaker 1: There we go. All right, let's move on. Matt. Let's

82
00:03:44,600 --> 00:03:46,440
Speaker 1: I mentioned the beer that we're having on the show.

83
00:03:46,480 --> 00:03:49,920
Speaker 1: This one is an Imperial Stout by Nunya, which is

84
00:03:49,920 --> 00:03:52,400
Speaker 1: a Norwegian brewery. Is that how you say? It's not

85
00:03:52,640 --> 00:03:56,280
Speaker 1: so it's written out none yeah and O g any.

86
00:03:56,280 --> 00:03:59,000
Speaker 1: Come on, I know my home country's cannciation. No, I

87
00:03:59,040 --> 00:04:01,080
Speaker 1: don't really, I just like I fold up a YouTube

88
00:04:01,320 --> 00:04:03,920
Speaker 1: googled it to hear the like Brewer or whatever give

89
00:04:03,960 --> 00:04:07,000
Speaker 1: his pronunciation, and I think it's none of you, but none,

90
00:04:07,240 --> 00:04:10,280
Speaker 1: none of your business in your business? All right. We

91
00:04:10,320 --> 00:04:11,960
Speaker 1: will give our thoughts on this one at the end

92
00:04:12,000 --> 00:04:14,960
Speaker 1: of the episode, but for now, let's get onto. Let's

93
00:04:15,000 --> 00:04:17,120
Speaker 1: move on to listening questions. And if you have a

94
00:04:17,200 --> 00:04:19,000
Speaker 1: question you would love Matt and I a tackle. We

95
00:04:19,040 --> 00:04:20,280
Speaker 1: would love to hear it. Just go to how to

96
00:04:20,360 --> 00:04:23,760
Speaker 1: money dot com slash ask. There are simple instructions there

97
00:04:23,760 --> 00:04:26,200
Speaker 1: for you to record your question send it our way.

98
00:04:26,279 --> 00:04:28,440
Speaker 1: Hopefully we can take it in the very near future.

99
00:04:28,520 --> 00:04:30,480
Speaker 1: But Matt, let's get to our first question, and this

100
00:04:30,520 --> 00:04:33,640
Speaker 1: one is about running a small business and trying to

101
00:04:33,680 --> 00:04:37,560
Speaker 1: avoid debt. Hey guys, this is Nadia from Atlanta, Georgia.

102
00:04:38,040 --> 00:04:41,240
Speaker 1: I have a question about how much risk is too

103
00:04:41,360 --> 00:04:46,400
Speaker 1: much risk to invest in your business. So I actually

104
00:04:46,440 --> 00:04:49,800
Speaker 1: started a stationary shop online stationary shop at the beginning

105
00:04:49,839 --> 00:04:52,080
Speaker 1: of the pandemic, and this was just born out of

106
00:04:52,120 --> 00:04:54,800
Speaker 1: my love for all things stationary. It is a hobby

107
00:04:54,839 --> 00:04:57,000
Speaker 1: that I genuinely enjoy and something that I was able

108
00:04:57,040 --> 00:04:59,520
Speaker 1: to deal a little bit more into with some of

109
00:04:59,560 --> 00:05:03,919
Speaker 1: the addition no time I had at home. So of course,

110
00:05:04,120 --> 00:05:07,200
Speaker 1: there are months and or seasons where I am making

111
00:05:07,240 --> 00:05:09,599
Speaker 1: a pretty decent profit and I'm able to pay off

112
00:05:09,839 --> 00:05:11,679
Speaker 1: all of my expenses that I use on my city

113
00:05:11,680 --> 00:05:13,760
Speaker 1: credit card for my business. But then there are other

114
00:05:13,800 --> 00:05:17,400
Speaker 1: seasons where I've invested in bringing in products and new

115
00:05:17,440 --> 00:05:19,680
Speaker 1: things into the shop, and then those are kind of

116
00:05:19,720 --> 00:05:22,160
Speaker 1: the low seasons where I am having to pull from

117
00:05:22,160 --> 00:05:24,039
Speaker 1: my own personal funds to be able to pay off

118
00:05:24,080 --> 00:05:26,760
Speaker 1: that business credit card. And so of course I know

119
00:05:26,839 --> 00:05:28,320
Speaker 1: that I have to spend money to be able to

120
00:05:28,320 --> 00:05:30,720
Speaker 1: bring in money, but how much risk is too much

121
00:05:30,760 --> 00:05:32,520
Speaker 1: of a risk. And then, of course, considering that this

122
00:05:32,560 --> 00:05:35,240
Speaker 1: is also a hobby of mine, how can I kind

123
00:05:35,240 --> 00:05:38,479
Speaker 1: of get myself together as relates to just bringing in

124
00:05:38,520 --> 00:05:40,800
Speaker 1: profit and then letting that profit leave just as quick

125
00:05:40,839 --> 00:05:43,480
Speaker 1: as it's coming in, because of course, I am continuing

126
00:05:43,520 --> 00:05:47,160
Speaker 1: to support other business owners or small shops that are

127
00:05:47,160 --> 00:05:50,560
Speaker 1: selling similarly cute see stationary that I really like. All Right,

128
00:05:50,640 --> 00:05:53,320
Speaker 1: thank you so so much for answering my question. Thank

129
00:05:53,320 --> 00:05:55,480
Speaker 1: you so much for all of your efforts with this podcast.

130
00:05:55,560 --> 00:05:57,560
Speaker 1: It is truly a gift and I look forward to

131
00:05:57,560 --> 00:06:02,080
Speaker 1: hear from y'all. Thank you, Joel, you are a gift, sir.

132
00:06:02,240 --> 00:06:05,200
Speaker 1: Thanks funny, Nadia, thank you so much for those kind words. Seriously,

133
00:06:05,279 --> 00:06:06,600
Speaker 1: what would you rather have if you had to choose

134
00:06:06,600 --> 00:06:09,000
Speaker 1: between me and the new Slide? Well, in the moments,

135
00:06:09,000 --> 00:06:10,919
Speaker 1: I would have chosen the slide because I'm really excited.

136
00:06:10,960 --> 00:06:12,800
Speaker 1: But you are the gift that keeps on giving, sir.

137
00:06:13,080 --> 00:06:16,520
Speaker 1: Mainstay in your life, you are, you are here to stay.

138
00:06:17,160 --> 00:06:20,040
Speaker 1: But Nadia, seriously, we we appreciate a of the question,

139
00:06:20,080 --> 00:06:22,200
Speaker 1: but b also you just listening to the show and

140
00:06:22,200 --> 00:06:25,160
Speaker 1: the kind words. Congrats on launching your own business there

141
00:06:25,200 --> 00:06:27,400
Speaker 1: over the pandemic. I think that was it was probably

142
00:06:27,400 --> 00:06:29,279
Speaker 1: a great time to start your own business while you

143
00:06:29,320 --> 00:06:32,039
Speaker 1: had some of that downtime. And the great thing about

144
00:06:32,040 --> 00:06:35,160
Speaker 1: online businesses in particular, they take a lot less overhead,

145
00:06:35,520 --> 00:06:37,560
Speaker 1: But of course, like you mentioned, you still gotta have

146
00:06:37,600 --> 00:06:40,000
Speaker 1: some inventory on hand. You have to make those purchases.

147
00:06:40,600 --> 00:06:43,560
Speaker 1: And I'm sure you're shipping bill isn't cheap either. No,

148
00:06:43,800 --> 00:06:47,200
Speaker 1: I'm sure it's not Amazon level shipping bills, but that

149
00:06:47,320 --> 00:06:48,880
Speaker 1: happens a big part of the cost I'm sure that

150
00:06:48,920 --> 00:06:52,599
Speaker 1: Nadia incurs, and in this industry is one of course,

151
00:06:52,600 --> 00:06:55,080
Speaker 1: where it does take some money to make money. You've

152
00:06:55,080 --> 00:06:58,120
Speaker 1: got to find the latest and greatest stationary Nadia. That's

153
00:06:58,200 --> 00:06:59,960
Speaker 1: kind of what you're in the business of, right is,

154
00:07:00,480 --> 00:07:02,320
Speaker 1: in order to sell to your customers. They're looking for

155
00:07:02,360 --> 00:07:04,880
Speaker 1: this well curated place and they're gonna come back to

156
00:07:04,920 --> 00:07:06,880
Speaker 1: your site if they feel like you're the person who's

157
00:07:06,920 --> 00:07:10,000
Speaker 1: got their kind of taste in mind. But that can

158
00:07:10,040 --> 00:07:12,240
Speaker 1: also get out of hand, right if you order, if

159
00:07:12,280 --> 00:07:14,280
Speaker 1: you order too much. So this is a delicate balance

160
00:07:14,280 --> 00:07:16,679
Speaker 1: that you're trying to weave, it seems like with this business.

161
00:07:16,960 --> 00:07:18,480
Speaker 1: Or let's say you end up ordering things that your

162
00:07:18,480 --> 00:07:21,120
Speaker 1: customers aren't necessarily into, and then maybe you have to

163
00:07:21,160 --> 00:07:24,400
Speaker 1: slash the price and and cuts into your profit margins.

164
00:07:24,800 --> 00:07:27,480
Speaker 1: That could be tough, and sometimes they can take a

165
00:07:27,520 --> 00:07:30,160
Speaker 1: couple of years really to dial in what it is

166
00:07:30,200 --> 00:07:32,640
Speaker 1: that your customer base is looking for. And I'm sure

167
00:07:32,680 --> 00:07:35,080
Speaker 1: you're you're starting now at this point to make decisions

168
00:07:35,440 --> 00:07:38,080
Speaker 1: based on the data that you're seeing from what your

169
00:07:38,120 --> 00:07:40,440
Speaker 1: customers like to buy and even when they like to

170
00:07:40,440 --> 00:07:44,120
Speaker 1: buy it, right because many different businesses are cyclical in nature.

171
00:07:44,440 --> 00:07:46,760
Speaker 1: I wonder I'm curious to know, like what stationary Like,

172
00:07:46,800 --> 00:07:49,480
Speaker 1: what's the busy month for stationary season. I think like

173
00:07:49,560 --> 00:07:51,680
Speaker 1: November would be would be a big time, like around

174
00:07:51,720 --> 00:07:54,560
Speaker 1: the holidays, I'll say, in the spring, April and May,

175
00:07:54,760 --> 00:07:57,440
Speaker 1: as kids are leaving school. I don't know, you write

176
00:07:57,440 --> 00:08:00,560
Speaker 1: notes to teachers or folks send notes tweet show they're

177
00:08:00,600 --> 00:08:02,280
Speaker 1: kind of wrapping up the semester. But I'm sure that

178
00:08:02,360 --> 00:08:04,480
Speaker 1: kind of thing. Birthdays and stuff like that happen all

179
00:08:04,520 --> 00:08:07,080
Speaker 1: the time. Thank you has happened all the time. So, um,

180
00:08:07,080 --> 00:08:09,880
Speaker 1: when was the last time you wrote a handwritten note

181
00:08:09,960 --> 00:08:11,920
Speaker 1: to somebody that? Much to my shame, It's been a

182
00:08:12,000 --> 00:08:13,880
Speaker 1: long time. But it is one of those things where

183
00:08:14,040 --> 00:08:16,640
Speaker 1: that I see it as such a highly valuable thing. Yeah,

184
00:08:16,680 --> 00:08:20,040
Speaker 1: it's something more. It goes so far if you were

185
00:08:20,120 --> 00:08:23,080
Speaker 1: to actually do that and so not Actually she didn't

186
00:08:23,080 --> 00:08:24,960
Speaker 1: even give a shout out. But we will reach out

187
00:08:24,960 --> 00:08:26,880
Speaker 1: to Nadia and maybe we will link to her shop

188
00:08:26,960 --> 00:08:29,120
Speaker 1: within the show notes for this episode. But now you're

189
00:08:29,160 --> 00:08:30,960
Speaker 1: you're kind of talking about the kind of that balance

190
00:08:31,000 --> 00:08:34,079
Speaker 1: between racking up too many expenses while also trying to

191
00:08:34,080 --> 00:08:36,360
Speaker 1: to grow that business. But bottom line, we would love

192
00:08:36,440 --> 00:08:38,200
Speaker 1: to see you to continue to push the profits within

193
00:08:38,240 --> 00:08:40,680
Speaker 1: the business, at least for now. And remember too, you

194
00:08:40,679 --> 00:08:42,760
Speaker 1: know this is a business, not a hobby. You actually

195
00:08:42,760 --> 00:08:45,960
Speaker 1: said the word hobby, But even that small change in

196
00:08:46,000 --> 00:08:48,960
Speaker 1: perception can can make a big deal with how it

197
00:08:49,120 --> 00:08:52,040
Speaker 1: is just how intentional you are in the moves that

198
00:08:52,080 --> 00:08:54,360
Speaker 1: you make with your business. Like, it feels easier a

199
00:08:54,400 --> 00:08:56,240
Speaker 1: lot easier to put a hobby on hold than it

200
00:08:56,280 --> 00:08:58,719
Speaker 1: does to put an actual business on hold that you're

201
00:08:58,720 --> 00:09:01,240
Speaker 1: looking to ramp up. But since it sounds like this

202
00:09:01,280 --> 00:09:03,480
Speaker 1: is still a side hustle for you, what you should

203
00:09:03,520 --> 00:09:05,680
Speaker 1: be looking to do is just to achieve a reasonable

204
00:09:05,760 --> 00:09:08,880
Speaker 1: level of scale by reaching some new customers. And so

205
00:09:08,920 --> 00:09:11,920
Speaker 1: I think funneling profits back into buying more products and

206
00:09:12,080 --> 00:09:15,240
Speaker 1: marketing to reach those ideal customers could help you to

207
00:09:15,360 --> 00:09:17,160
Speaker 1: build your site and to help you to grow your

208
00:09:17,200 --> 00:09:19,400
Speaker 1: reach more quickly. The other thing I want to mention

209
00:09:19,480 --> 00:09:21,360
Speaker 1: here too, I was I'm kind of knocking on you

210
00:09:21,400 --> 00:09:23,440
Speaker 1: calling it calling it a hobby, but maybe that was

211
00:09:23,440 --> 00:09:25,960
Speaker 1: like a Frodian slip, and maybe that's you being honest

212
00:09:26,000 --> 00:09:30,080
Speaker 1: with yourself, And I think that's totally fine. If you've

213
00:09:30,080 --> 00:09:32,960
Speaker 1: got this hobby that you really enjoy and maybe you

214
00:09:33,000 --> 00:09:35,760
Speaker 1: don't necessarily want to ramp it up. I think it's

215
00:09:35,800 --> 00:09:38,559
Speaker 1: one okay for you to have the stationary hobby. I

216
00:09:38,559 --> 00:09:41,520
Speaker 1: also think it's okay for you to look to to

217
00:09:41,640 --> 00:09:44,600
Speaker 1: grow this thing like you would an actual business, regardless

218
00:09:44,640 --> 00:09:46,439
Speaker 1: of what path you choose, as long as you're you're

219
00:09:46,480 --> 00:09:49,600
Speaker 1: being honest with yourself and you're not calling it, for instance,

220
00:09:49,600 --> 00:09:51,800
Speaker 1: a business, even though you're treating it like a hobby

221
00:09:51,920 --> 00:09:55,160
Speaker 1: and it's making perhaps no money. Yeah, calling things by

222
00:09:55,240 --> 00:09:57,520
Speaker 1: their proper name can have a big impact on the

223
00:09:57,520 --> 00:10:00,320
Speaker 1: way you feel about that thing, whether it's your business

224
00:10:00,400 --> 00:10:02,319
Speaker 1: or your hobby. And if you're calling what you want

225
00:10:02,360 --> 00:10:04,440
Speaker 1: to be a business a hobby, then that's gonna have

226
00:10:04,520 --> 00:10:07,319
Speaker 1: implications in how you treat it and then ultimately in

227
00:10:07,360 --> 00:10:08,840
Speaker 1: the profits. And I like what you said, they're mad

228
00:10:08,880 --> 00:10:11,640
Speaker 1: about funneling as well, right, because I mean, if it's

229
00:10:12,120 --> 00:10:14,480
Speaker 1: a hobby and she starts calling it a business, that

230
00:10:14,480 --> 00:10:17,280
Speaker 1: could potentially suck the joy totally because she's kind of

231
00:10:17,280 --> 00:10:19,880
Speaker 1: treating it as this as a different entity compared to

232
00:10:19,920 --> 00:10:21,840
Speaker 1: how it is that she she truly wants to interact

233
00:10:21,840 --> 00:10:24,000
Speaker 1: with you. It could take something that is a labor

234
00:10:24,040 --> 00:10:26,360
Speaker 1: of love as just kind of a super fun thing

235
00:10:26,360 --> 00:10:28,160
Speaker 1: in your life, and it can turn it into drudgery

236
00:10:28,840 --> 00:10:30,840
Speaker 1: if you're thinking about it the wrong way. Exactly, agreed.

237
00:10:30,960 --> 00:10:32,520
Speaker 1: I love what you said, though, and it sounds like

238
00:10:32,559 --> 00:10:34,400
Speaker 1: what Nadia wants us to be is a business. That's

239
00:10:34,400 --> 00:10:36,559
Speaker 1: what I'm gathering, and she wants to grow it. And

240
00:10:36,600 --> 00:10:39,000
Speaker 1: I like what you said about funneling profits back into

241
00:10:39,320 --> 00:10:42,840
Speaker 1: the business, because that's what the Jeff Bezos Animal Amazon model.

242
00:10:43,080 --> 00:10:46,280
Speaker 1: It's that. Let's that's the Starbucks model. Let's find our Yeah,

243
00:10:46,320 --> 00:10:49,160
Speaker 1: let's find our customers. Let's grow this business, and then

244
00:10:49,160 --> 00:10:51,080
Speaker 1: eventually we can start taking profits out. And I think

245
00:10:51,160 --> 00:10:55,480
Speaker 1: that that's really smart, especially while uh, Nadia has a

246
00:10:55,600 --> 00:10:57,880
Speaker 1: job that's paying the bills and you know, it's it's

247
00:10:57,880 --> 00:10:59,800
Speaker 1: always good. Let's talk about reserves for a second, because

248
00:10:59,840 --> 00:11:01,840
Speaker 1: it's always good to have money in reserves to be

249
00:11:01,880 --> 00:11:04,400
Speaker 1: building that up. We don't want her to use all

250
00:11:04,440 --> 00:11:06,400
Speaker 1: her profit, let's say, from June, and to plow it

251
00:11:06,480 --> 00:11:08,800
Speaker 1: back into buying more products to list on the site

252
00:11:08,840 --> 00:11:11,480
Speaker 1: in July. Even though we do want her to be

253
00:11:11,640 --> 00:11:13,800
Speaker 1: building up the business. We want you to slowly at

254
00:11:13,800 --> 00:11:15,760
Speaker 1: the same time. Now, you build up that reserve with

255
00:11:15,880 --> 00:11:19,160
Speaker 1: each successful month so that you never find yourself tapping

256
00:11:19,200 --> 00:11:21,040
Speaker 1: into your personal funds. That's what we won't want you

257
00:11:21,120 --> 00:11:24,600
Speaker 1: to avoid. Basically, from here into the future. We we

258
00:11:24,679 --> 00:11:26,920
Speaker 1: do draw salary Matt and I do from the podcast

259
00:11:26,960 --> 00:11:28,960
Speaker 1: earnings that we get, but it took us a while

260
00:11:29,040 --> 00:11:32,000
Speaker 1: to get to that point. We had jobs for years

261
00:11:32,040 --> 00:11:34,880
Speaker 1: while we were building this business, but we also saved

262
00:11:35,000 --> 00:11:37,679
Speaker 1: a decent chunk every single month to be able to

263
00:11:37,720 --> 00:11:41,280
Speaker 1: sustain us during the leaner months, and we were also

264
00:11:41,320 --> 00:11:43,960
Speaker 1: saving for for other bigger goals that we wanted the

265
00:11:43,960 --> 00:11:45,599
Speaker 1: business to be able to achieve, like being able to

266
00:11:45,679 --> 00:11:47,920
Speaker 1: hire someone to help us do more cool stuff in

267
00:11:47,960 --> 00:11:50,160
Speaker 1: the near future. And so I think it's an important

268
00:11:50,200 --> 00:11:53,360
Speaker 1: thing for you to have a business savings accounts and

269
00:11:53,400 --> 00:11:55,800
Speaker 1: to be every time you've got a killer month and

270
00:11:55,840 --> 00:11:58,760
Speaker 1: outside month of performance, to be funneling some of that

271
00:11:58,840 --> 00:12:01,920
Speaker 1: money not just back into business, not just into buying

272
00:12:02,000 --> 00:12:05,240
Speaker 1: more product and doing more marketing, but to actually be

273
00:12:05,360 --> 00:12:08,080
Speaker 1: saving money for those months maybe that might not be

274
00:12:08,200 --> 00:12:11,600
Speaker 1: as successful, so that you can continue to build your

275
00:12:11,600 --> 00:12:14,800
Speaker 1: business even when sales are slow. Yeah. Basically, what we're

276
00:12:14,800 --> 00:12:16,679
Speaker 1: trying to do is for you to to draw a

277
00:12:16,720 --> 00:12:19,920
Speaker 1: clear line between your personal finances here as well as

278
00:12:19,960 --> 00:12:22,040
Speaker 1: the business. Uh. And you know you asked if you're

279
00:12:22,040 --> 00:12:24,360
Speaker 1: getting too risky with with how it is that you're

280
00:12:24,360 --> 00:12:27,880
Speaker 1: purchasing inventory. The great thing is that you you really

281
00:12:27,880 --> 00:12:31,120
Speaker 1: aren't doing anything terribly risky here. You've started something that

282
00:12:31,240 --> 00:12:34,440
Speaker 1: is actually bringing in some money now, which is crazy exciting,

283
00:12:34,760 --> 00:12:37,680
Speaker 1: and it also has this huge upside potential, not all

284
00:12:37,840 --> 00:12:40,680
Speaker 1: while you've got this regular income coming from your full

285
00:12:40,679 --> 00:12:42,960
Speaker 1: time job. On the other hand, let's say if you

286
00:12:43,000 --> 00:12:45,240
Speaker 1: ask just about quitting your day job to go all

287
00:12:45,280 --> 00:12:47,840
Speaker 1: in now, that would be a little bit more risky,

288
00:12:48,200 --> 00:12:50,600
Speaker 1: but with hard work, with some smart planning, I think

289
00:12:50,600 --> 00:12:52,720
Speaker 1: you might be there just in a year or two

290
00:12:52,800 --> 00:12:54,600
Speaker 1: down the road if this was something that you were

291
00:12:54,679 --> 00:12:57,960
Speaker 1: wanting to pursue full time. But going back to the

292
00:12:58,000 --> 00:13:00,280
Speaker 1: headspace that you find yourself in as you are thinking

293
00:13:00,320 --> 00:13:02,520
Speaker 1: about this, and if you are looking to increase your profits,

294
00:13:02,760 --> 00:13:05,200
Speaker 1: make sure that you are treating this like a business,

295
00:13:05,320 --> 00:13:08,120
Speaker 1: not as a hobby. And I think that that mindset

296
00:13:08,200 --> 00:13:11,040
Speaker 1: shift will honestly answer a lot of questions for you,

297
00:13:11,160 --> 00:13:13,880
Speaker 1: because you're asking about well, supporting some other makers, some

298
00:13:13,920 --> 00:13:16,800
Speaker 1: other creators, online who are are selling different products. You

299
00:13:16,840 --> 00:13:19,599
Speaker 1: will then be able to hopefully look at those purchases

300
00:13:19,920 --> 00:13:22,360
Speaker 1: through the lens of a small business owner. Does this

301
00:13:22,480 --> 00:13:24,560
Speaker 1: make sense? Is this going to be profitable? Will people

302
00:13:24,600 --> 00:13:27,040
Speaker 1: buy this? Buy this product? Those are all the kind

303
00:13:27,040 --> 00:13:29,280
Speaker 1: of questions that we hope that you will be asking yourself. Yeah,

304
00:13:29,320 --> 00:13:32,400
Speaker 1: for sure. And I would point Nadia too to an

305
00:13:32,400 --> 00:13:34,800
Speaker 1: episode we did a few months ago with Shannon Weinstein

306
00:13:35,320 --> 00:13:37,559
Speaker 1: that was about taxes. But she she talked a whole

307
00:13:37,640 --> 00:13:40,880
Speaker 1: lot about how starting a small business while you're gainfully

308
00:13:40,880 --> 00:13:43,560
Speaker 1: employed full time, how that can actually be a benefit

309
00:13:43,600 --> 00:13:45,959
Speaker 1: to you tax wise. So, Nadia, we'd recommend you go

310
00:13:46,000 --> 00:13:48,040
Speaker 1: back and listen to that because there are a lot

311
00:13:48,080 --> 00:13:51,200
Speaker 1: of nuggets in there. They can actually help you save

312
00:13:51,280 --> 00:13:54,319
Speaker 1: money when it comes to the I R S and

313
00:13:54,320 --> 00:13:57,000
Speaker 1: and what you owe the federal government. So go back

314
00:13:57,000 --> 00:13:59,000
Speaker 1: and check in on that one, because it's nice to

315
00:13:59,000 --> 00:14:01,240
Speaker 1: get a tax benefit from the business that you're you're

316
00:14:01,320 --> 00:14:03,480
Speaker 1: running exactly. Well, what's super cool about that is that

317
00:14:03,800 --> 00:14:05,800
Speaker 1: let's say let's again let's the script and say that

318
00:14:05,840 --> 00:14:08,000
Speaker 1: she's thinking about this and only wants to pursue the

319
00:14:08,040 --> 00:14:11,000
Speaker 1: stationary shop as a hobby. Right, Well, she was talking

320
00:14:11,000 --> 00:14:13,240
Speaker 1: about how she has a business credit card, so that

321
00:14:13,280 --> 00:14:15,280
Speaker 1: means she has an E I N right, an employment

322
00:14:15,320 --> 00:14:18,480
Speaker 1: identification number, which means that this is a legitimate business.

323
00:14:18,480 --> 00:14:21,440
Speaker 1: And so even if in her headspace she's only treating

324
00:14:21,440 --> 00:14:22,960
Speaker 1: it like a hobby, that doesn't mean that the I

325
00:14:23,080 --> 00:14:27,640
Speaker 1: R S isn't looking at her as a fully fledged business. Uh.

326
00:14:27,680 --> 00:14:30,440
Speaker 1: And so yeah, the ability to deduct some of those expenses,

327
00:14:30,640 --> 00:14:32,840
Speaker 1: that is absolutely going to help her out down the

328
00:14:32,840 --> 00:14:35,880
Speaker 1: line when it comes to her finances. Nandia is it

329
00:14:35,920 --> 00:14:37,640
Speaker 1: has turned into a butterfly at this point. And even

330
00:14:37,680 --> 00:14:39,680
Speaker 1: though she might see herself still as a caterpillar math

331
00:14:39,720 --> 00:14:41,560
Speaker 1: the I R S he sort as a butterfly. So

332
00:14:41,640 --> 00:14:44,800
Speaker 1: that's true. So Nadya, we wish you the best of

333
00:14:44,880 --> 00:14:46,920
Speaker 1: luck as you continue to grow this thing, and we

334
00:14:46,960 --> 00:14:48,800
Speaker 1: hope you have fun doing it. All right, Matt, let's

335
00:14:48,920 --> 00:14:52,200
Speaker 1: get a couple more questions, including one about our car

336
00:14:52,280 --> 00:14:54,920
Speaker 1: buying philosophy. We'll we'll tackle that and more right after

337
00:14:54,920 --> 00:15:06,240
Speaker 1: this break. All right, we are back and we're taking

338
00:15:06,320 --> 00:15:08,520
Speaker 1: listener questions. Let's get to one that has to do

339
00:15:08,800 --> 00:15:12,440
Speaker 1: with the second largest item on our monthly budgets, transportation.

340
00:15:13,360 --> 00:15:17,160
Speaker 1: How to money is your friend Jesse from Rochester. What's up, guys.

341
00:15:17,600 --> 00:15:21,400
Speaker 1: I'm getting a lot of questions recently about cars, specifically

342
00:15:21,520 --> 00:15:25,640
Speaker 1: new versus used versus leasing, what the best options are,

343
00:15:25,840 --> 00:15:29,600
Speaker 1: how to compare prices, what people should do and Uh,

344
00:15:29,640 --> 00:15:31,960
Speaker 1: I have my thoughts on it, but I'm curious to

345
00:15:32,040 --> 00:15:34,640
Speaker 1: hear what you guys think and how you would advise

346
00:15:34,720 --> 00:15:38,480
Speaker 1: the How to Money Nation. Thanks guys, all right, Matt,

347
00:15:38,520 --> 00:15:41,600
Speaker 1: It's it's not often that we get a question from

348
00:15:41,600 --> 00:15:44,800
Speaker 1: someone who already knows the answer, a question from someone

349
00:15:44,880 --> 00:15:47,640
Speaker 1: who we actually know, who are friends with. Almost everybody

350
00:15:47,840 --> 00:15:50,600
Speaker 1: are random listeners who we love even though we don't

351
00:15:50,600 --> 00:15:52,520
Speaker 1: know them. But this is somebody that we love and

352
00:15:52,520 --> 00:15:55,920
Speaker 1: know and and so Jesse. Yeah, he's a fellow finance nerd.

353
00:15:56,000 --> 00:15:58,800
Speaker 1: He writes over at the Best Interest. He podcasts by

354
00:15:58,840 --> 00:16:01,200
Speaker 1: that name too, And Jesse, thanks so much for this question.

355
00:16:02,240 --> 00:16:04,160
Speaker 1: Uh last a couple of months ago that I think

356
00:16:04,160 --> 00:16:05,880
Speaker 1: it's comfortable. I look very good in it. I'm not

357
00:16:05,920 --> 00:16:07,520
Speaker 1: gonna I'm not gonna lie, and I don't pull off

358
00:16:07,560 --> 00:16:10,440
Speaker 1: many things. But thank you Jesse for for making my

359
00:16:10,520 --> 00:16:13,360
Speaker 1: wardrobe a little nicer with that shirt. And but there's

360
00:16:13,360 --> 00:16:14,920
Speaker 1: a lot to cover in this question, Matt, So let's

361
00:16:14,960 --> 00:16:17,640
Speaker 1: get into it. Because our car buying philosophy, we can't

362
00:16:17,640 --> 00:16:19,320
Speaker 1: sum it up in just a few words. There's there's

363
00:16:19,400 --> 00:16:21,760
Speaker 1: really a lot that we have to dig into. And

364
00:16:22,000 --> 00:16:24,040
Speaker 1: I want to say this too, I think even smart

365
00:16:24,080 --> 00:16:27,240
Speaker 1: folks can maybe have different opinions on what the right

366
00:16:27,280 --> 00:16:29,720
Speaker 1: answer is here. And I put right in quotation marks

367
00:16:29,760 --> 00:16:33,040
Speaker 1: because it's so much of this comes down to things

368
00:16:33,040 --> 00:16:35,480
Speaker 1: other than money. But we're gonna give, you know, our

369
00:16:35,480 --> 00:16:38,400
Speaker 1: best assessment because our our friend Jail Collins. You know,

370
00:16:38,440 --> 00:16:40,680
Speaker 1: he came on the show and he talked about why

371
00:16:40,720 --> 00:16:43,520
Speaker 1: he bought a brand new car. And I know some

372
00:16:43,560 --> 00:16:47,560
Speaker 1: people in the personal finance community would just have a

373
00:16:47,560 --> 00:16:49,960
Speaker 1: connection fit because they think that that's absurd and no

374
00:16:49,960 --> 00:16:51,880
Speaker 1: one should ever do that. But I don't think that's

375
00:16:51,880 --> 00:16:54,720
Speaker 1: the case. And I think Jail had a perfectly good

376
00:16:54,720 --> 00:16:56,760
Speaker 1: reason for why he bought a new car. I think

377
00:16:56,760 --> 00:16:59,120
Speaker 1: it can make sense in some scenarios, especially if you're

378
00:16:59,120 --> 00:17:02,040
Speaker 1: willing to commit to owning that car for at least

379
00:17:02,080 --> 00:17:04,880
Speaker 1: ten years. I even wrote an article on our website

380
00:17:04,880 --> 00:17:07,520
Speaker 1: about when buying a new car makes sense. Will link

381
00:17:07,560 --> 00:17:09,520
Speaker 1: to that as well in the show notes. But you know,

382
00:17:09,560 --> 00:17:12,679
Speaker 1: other people promote extreme frugality when it comes to that

383
00:17:12,720 --> 00:17:14,520
Speaker 1: car purchase. And you know what, Man, I think I

384
00:17:14,600 --> 00:17:17,280
Speaker 1: in particular probably tend to lead lean towards that side

385
00:17:17,280 --> 00:17:20,520
Speaker 1: of the spectrum myself. Yeah, you definitely do. UM. And

386
00:17:20,560 --> 00:17:22,040
Speaker 1: it's sort of going back to what you're saying about

387
00:17:22,080 --> 00:17:24,080
Speaker 1: this being like the right like a right or wrong answer.

388
00:17:24,119 --> 00:17:25,800
Speaker 1: It's sort of like someone saying that there is a

389
00:17:25,920 --> 00:17:28,320
Speaker 1: right number of kids to have. It just depends on

390
00:17:28,400 --> 00:17:30,320
Speaker 1: so many things. It depends on what it is that

391
00:17:30,359 --> 00:17:32,560
Speaker 1: you value and what you're looking for. About two and

392
00:17:32,560 --> 00:17:33,960
Speaker 1: a half was the right answer, and a half is

393
00:17:34,000 --> 00:17:36,720
Speaker 1: the average, but honestly, I think it's less than that

394
00:17:36,760 --> 00:17:38,480
Speaker 1: at this point. Probably I think it's like one point

395
00:17:38,480 --> 00:17:41,560
Speaker 1: eight or some think that. Um. But generally speaking, the

396
00:17:41,560 --> 00:17:44,399
Speaker 1: happy medium that you'll hear a lot of folks in

397
00:17:44,440 --> 00:17:46,840
Speaker 1: the space, in the personal finance space to recommend is

398
00:17:46,880 --> 00:17:50,160
Speaker 1: to buy a two to three year old car. That's

399
00:17:50,240 --> 00:17:54,200
Speaker 1: not terrible advice. The main chunk of depreciation happens within

400
00:17:54,200 --> 00:17:56,440
Speaker 1: that time period, and so buying let's say a three

401
00:17:56,520 --> 00:17:59,920
Speaker 1: year old car can save you off the sticker price.

402
00:18:00,000 --> 00:18:02,679
Speaker 1: I think typically you lose ten percent just by driving

403
00:18:02,720 --> 00:18:05,120
Speaker 1: the car off a lot another ten percent every year

404
00:18:05,160 --> 00:18:07,119
Speaker 1: for the first five years. This is, of course, at

405
00:18:07,200 --> 00:18:09,360
Speaker 1: least within a normal used car environment, which we haven't

406
00:18:09,359 --> 00:18:11,679
Speaker 1: experienced for a couple of years. But this also allows

407
00:18:11,680 --> 00:18:14,200
Speaker 1: you to drive a car that typically needs very little

408
00:18:14,320 --> 00:18:17,240
Speaker 1: in maintenance costs if it's only got thirty to forty

409
00:18:17,600 --> 00:18:19,320
Speaker 1: miles on it. And so this is gonna be a

410
00:18:19,320 --> 00:18:22,240
Speaker 1: solid choice for many frugal folks who are paying attention

411
00:18:22,240 --> 00:18:25,119
Speaker 1: to how much they're spending on their transportation. If you

412
00:18:25,160 --> 00:18:27,399
Speaker 1: buy that gently used car, you drive it for at

413
00:18:27,440 --> 00:18:30,920
Speaker 1: least five years, this is gonna be a reasonable financial move.

414
00:18:30,960 --> 00:18:33,120
Speaker 1: You're gonna you know you're doing the car thing better

415
00:18:33,119 --> 00:18:34,840
Speaker 1: than most folks if you if you take this path.

416
00:18:35,240 --> 00:18:38,400
Speaker 1: But we are partial to buying even older cars, and

417
00:18:38,520 --> 00:18:41,760
Speaker 1: the reason is because you'll you'll save even more. Personally,

418
00:18:41,760 --> 00:18:44,480
Speaker 1: I like saving money by buying a vehicle. So how

419
00:18:44,640 --> 00:18:46,520
Speaker 1: our van we bought when it was five years old,

420
00:18:46,520 --> 00:18:49,640
Speaker 1: But Joel, you like going even older? Yeah, I mean

421
00:18:49,640 --> 00:18:51,800
Speaker 1: I think five years old is is a good move.

422
00:18:51,840 --> 00:18:53,840
Speaker 1: Like you said, Matt, you've taken You've gotten most of

423
00:18:53,880 --> 00:18:56,760
Speaker 1: the appreciation out of the way. You're making more of

424
00:18:56,800 --> 00:18:59,800
Speaker 1: a money savvy move. But I think when when you

425
00:18:59,800 --> 00:19:02,560
Speaker 1: look of the numbers, buying an even older car can

426
00:19:02,640 --> 00:19:05,159
Speaker 1: make even more sense for lots of folks. Right, Um,

427
00:19:06,280 --> 00:19:08,679
Speaker 1: use cars obviously have been going up in value over

428
00:19:08,720 --> 00:19:10,720
Speaker 1: the last couple of years. That is an anomaly. It's

429
00:19:10,720 --> 00:19:13,160
Speaker 1: not going to continue to happen. But it's true that

430
00:19:13,280 --> 00:19:15,960
Speaker 1: I think buying an even older car holds up when

431
00:19:16,040 --> 00:19:18,240
Speaker 1: we look at the numbers today or a couple of

432
00:19:18,280 --> 00:19:21,800
Speaker 1: years ago or two years from now. And so something

433
00:19:21,840 --> 00:19:24,080
Speaker 1: like buying a ten year old car I think makes

434
00:19:24,160 --> 00:19:26,119
Speaker 1: more sense for lots of folks because it comes with

435
00:19:26,160 --> 00:19:30,199
Speaker 1: a lower sticker price, lower upfront cost, and then the

436
00:19:30,240 --> 00:19:33,040
Speaker 1: repair bills aren't nearly as much as most people assume

437
00:19:33,119 --> 00:19:35,399
Speaker 1: they're going to be on on an older car. And

438
00:19:35,440 --> 00:19:37,120
Speaker 1: that's the biggest thing is people are like, I don't

439
00:19:37,119 --> 00:19:39,720
Speaker 1: want my car to be in the shop once a month,

440
00:19:40,520 --> 00:19:42,600
Speaker 1: and so a ten year old car, if this if thinks,

441
00:19:42,640 --> 00:19:44,880
Speaker 1: if this thing is a decade old, that's what's gonna

442
00:19:44,920 --> 00:19:46,119
Speaker 1: happen to me, I don't want to be put in

443
00:19:46,119 --> 00:19:48,920
Speaker 1: that position. Well, the numbers just don't bear that out.

444
00:19:49,040 --> 00:19:52,240
Speaker 1: And because when you look, according to consumer reports, the

445
00:19:52,320 --> 00:19:54,879
Speaker 1: average annual cost of maintenance on a five year old

446
00:19:54,920 --> 00:19:57,959
Speaker 1: car is two five dollars. Well, a ten year old

447
00:19:58,000 --> 00:20:00,119
Speaker 1: car is gonna cost you four hundred and third ty

448
00:20:00,160 --> 00:20:02,600
Speaker 1: dollars a year on average, and so yeah, that's two

449
00:20:02,640 --> 00:20:05,920
Speaker 1: hundred bucks more. But when you factor in that that

450
00:20:06,080 --> 00:20:09,240
Speaker 1: small amount of additional maintenance, it's really a pittance every

451
00:20:09,240 --> 00:20:12,720
Speaker 1: single year compared to the initial price tag. Uh, the

452
00:20:12,800 --> 00:20:15,080
Speaker 1: much smaller initial price tag you're gonna be faced with

453
00:20:15,400 --> 00:20:17,199
Speaker 1: when you make that purchase in the first place. And

454
00:20:17,240 --> 00:20:20,800
Speaker 1: so if you want to keep more money either in

455
00:20:20,840 --> 00:20:24,439
Speaker 1: your savings account or allocate more towards investments, and just

456
00:20:24,480 --> 00:20:27,040
Speaker 1: to kind of have more flexibility with your money, I

457
00:20:27,080 --> 00:20:28,919
Speaker 1: think a ten year old car is actually kind of

458
00:20:28,920 --> 00:20:31,320
Speaker 1: the sweet spot for a lot of folks who prize

459
00:20:31,560 --> 00:20:35,960
Speaker 1: frugality more than the prize having a nice looking car. Yeah,

460
00:20:35,960 --> 00:20:38,679
Speaker 1: the reality is that two bucks that's not a lot

461
00:20:38,720 --> 00:20:40,560
Speaker 1: of money. I mean, like when you're looking at the

462
00:20:40,600 --> 00:20:43,600
Speaker 1: average car loan, that's like a third of what a

463
00:20:43,640 --> 00:20:45,960
Speaker 1: single month's payment would be. So I think it's less

464
00:20:45,960 --> 00:20:49,920
Speaker 1: of the dollars, and it's more about what that cost represents, right,

465
00:20:50,440 --> 00:20:52,879
Speaker 1: because what it does it does represent you being told no,

466
00:20:54,080 --> 00:20:56,160
Speaker 1: it means that at some point, yeah, maybe your car

467
00:20:56,200 --> 00:20:59,720
Speaker 1: is gonna break down. Uh, and it it represents inconvenience,

468
00:20:59,720 --> 00:21:02,640
Speaker 1: and I thing because of that, it looms larger than

469
00:21:02,720 --> 00:21:06,440
Speaker 1: the actual dollar amounts prove out. Yeah, it feels more

470
00:21:06,600 --> 00:21:10,480
Speaker 1: like interrational fear, kind of like when definitely more emotional. Yeah,

471
00:21:10,400 --> 00:21:12,600
Speaker 1: when we hear people the dollars and cents talk about

472
00:21:12,600 --> 00:21:14,919
Speaker 1: the reasons they don't want to become a landlord, it's like, well,

473
00:21:14,960 --> 00:21:16,720
Speaker 1: what about those three am phone calls with the leaky

474
00:21:16,760 --> 00:21:18,920
Speaker 1: toilets and blah blah blah. It's like, I've never had

475
00:21:18,920 --> 00:21:20,920
Speaker 1: one of those. Literally, I've never had one of them. Ever.

476
00:21:21,000 --> 00:21:23,680
Speaker 1: I'm not saying it's not possible, but I'm saying that

477
00:21:23,800 --> 00:21:28,320
Speaker 1: is an emotional block to something that could be massively beneficial.

478
00:21:28,359 --> 00:21:31,200
Speaker 1: And you're letting one small what if question get in

479
00:21:31,240 --> 00:21:34,920
Speaker 1: the way of something that it could be a huge

480
00:21:34,920 --> 00:21:38,800
Speaker 1: benefit to your ability to pursue financial freedom. Yeah. And plus,

481
00:21:38,840 --> 00:21:41,040
Speaker 1: I mean the fact is, with uber and Lift, we

482
00:21:41,080 --> 00:21:43,000
Speaker 1: have the ability to get where we need to without

483
00:21:43,160 --> 00:21:46,200
Speaker 1: much inconvenience, hardly at all. Um And oftentimes folks who

484
00:21:46,200 --> 00:21:49,360
Speaker 1: are visiting the garage once a month, it's often times,

485
00:21:49,400 --> 00:21:51,719
Speaker 1: I think because they haven't done a great job researching

486
00:21:51,760 --> 00:21:53,960
Speaker 1: a good mechanic, and I think if you can get

487
00:21:53,960 --> 00:21:55,840
Speaker 1: that figured out and you can go somewhere where you

488
00:21:55,920 --> 00:21:57,600
Speaker 1: know that you're being taken care of, then that's going

489
00:21:57,640 --> 00:21:59,480
Speaker 1: to be a problem that you rarely have to deal with.

490
00:21:59,560 --> 00:22:01,800
Speaker 1: I think a really important point too, because when we're

491
00:22:01,800 --> 00:22:03,520
Speaker 1: talking about buying an older car, you have to be

492
00:22:03,560 --> 00:22:06,720
Speaker 1: even more careful. And so it's easier to buy a

493
00:22:06,720 --> 00:22:09,159
Speaker 1: two or three year old car, and it's it's harder

494
00:22:09,200 --> 00:22:10,800
Speaker 1: to make a mistake, but when you're buying a ten

495
00:22:10,840 --> 00:22:12,440
Speaker 1: year old car, you have to pay even more close

496
00:22:12,480 --> 00:22:14,600
Speaker 1: attention to the kind of car you're getting. You want

497
00:22:14,600 --> 00:22:18,280
Speaker 1: to pay more attention to the brand for reliability, looking

498
00:22:18,320 --> 00:22:20,960
Speaker 1: at a site like Consumer Reports or JD Power to

499
00:22:21,040 --> 00:22:24,080
Speaker 1: kind of see, well, how reliable is this car, because

500
00:22:24,119 --> 00:22:26,080
Speaker 1: the make and model is gonna matter even more when

501
00:22:26,119 --> 00:22:28,680
Speaker 1: you're talking about something that's that's that much older. You also,

502
00:22:28,800 --> 00:22:30,320
Speaker 1: like you said, Matt, you want to get that car

503
00:22:30,800 --> 00:22:33,760
Speaker 1: inspected by a mechanic before you buy it, because even

504
00:22:33,760 --> 00:22:36,280
Speaker 1: if it's a reliable car, you want to make sure

505
00:22:36,400 --> 00:22:39,639
Speaker 1: that this particular one is in good working order for

506
00:22:39,680 --> 00:22:42,440
Speaker 1: you too. But yeah, when you're talking about potential savings

507
00:22:42,480 --> 00:22:45,159
Speaker 1: in the ten k plus range. You know, older cars

508
00:22:45,280 --> 00:22:47,959
Speaker 1: are worth a very long look for most people. Are

509
00:22:48,040 --> 00:22:50,760
Speaker 1: minivan cost us five thousand dollars a few years ago.

510
00:22:50,880 --> 00:22:52,960
Speaker 1: It's a two thousand six with a hundred and seventy

511
00:22:52,960 --> 00:22:56,960
Speaker 1: thousand miles on it. Has it been perfect? No, it's

512
00:22:56,960 --> 00:22:59,560
Speaker 1: had some issues that we've had to get fixed along

513
00:22:59,560 --> 00:23:03,919
Speaker 1: the way for someonality. Yeah. Is it gorgeous, No, it's

514
00:23:03,960 --> 00:23:06,400
Speaker 1: it's kind of weird looking. No, dude, I would say

515
00:23:06,400 --> 00:23:08,440
Speaker 1: that it's actually really like the condition of the paint

516
00:23:08,480 --> 00:23:10,280
Speaker 1: on your van is actually in great shape. It looks

517
00:23:10,320 --> 00:23:11,600
Speaker 1: I mean, it's got a nice shine to it. Maybe

518
00:23:11,600 --> 00:23:13,600
Speaker 1: it's just the powder blue color where I feel like

519
00:23:13,600 --> 00:23:15,280
Speaker 1: I'm stick out like a sore thrumb when I drive

520
00:23:15,320 --> 00:23:17,520
Speaker 1: a thing around. Does feel like Jim Carrey's suit from

521
00:23:17,520 --> 00:23:20,240
Speaker 1: the Number. Yes, a little bit, a little bit definitely

522
00:23:20,280 --> 00:23:21,880
Speaker 1: over there putting out the vibe. But you know what

523
00:23:22,000 --> 00:23:23,679
Speaker 1: the cool thing is if you lean into it, and

524
00:23:23,760 --> 00:23:26,399
Speaker 1: you lean into it hard, nobody cares, and most people

525
00:23:26,440 --> 00:23:28,679
Speaker 1: just assume that you're really really confident about it, And

526
00:23:28,720 --> 00:23:30,720
Speaker 1: so I try to lean in. But what if I

527
00:23:30,720 --> 00:23:35,160
Speaker 1: had a bright orange fan would be perfect? I think

528
00:23:35,160 --> 00:23:36,879
Speaker 1: we need to do that. Oh man, that'd be awesome.

529
00:23:37,080 --> 00:23:39,520
Speaker 1: I can. I'll paint your card this weekend. But yeah,

530
00:23:39,720 --> 00:23:42,240
Speaker 1: while it's not necessarily the most beautiful thing, our main

531
00:23:42,320 --> 00:23:45,000
Speaker 1: concern is that it's reliable, that it's saving us money.

532
00:23:45,359 --> 00:23:47,199
Speaker 1: And for the most part, we treat our vehicles as

533
00:23:47,240 --> 00:23:49,359
Speaker 1: point A to point be transportation. We just want to

534
00:23:49,359 --> 00:23:52,480
Speaker 1: save as much money as possible in order to funnel

535
00:23:52,480 --> 00:23:56,320
Speaker 1: our dollars towards things that we care about more. And so, yeah,

536
00:23:56,400 --> 00:23:58,720
Speaker 1: that potentially could change if we decided to buy a

537
00:23:58,800 --> 00:24:01,000
Speaker 1: Rivian someday or something like that, but for for the

538
00:24:01,000 --> 00:24:02,840
Speaker 1: most part, that's how we feel about cars, at least

539
00:24:02,840 --> 00:24:05,360
Speaker 1: at this present moment. Once Vivian starts making a seven

540
00:24:05,480 --> 00:24:08,719
Speaker 1: passenger van seriously and start looking, oh my gosh, if

541
00:24:08,720 --> 00:24:11,680
Speaker 1: we get an electric minivan, I'm in. Well, everything we're

542
00:24:11,680 --> 00:24:14,480
Speaker 1: talking about here, these financial impacts. One something I wanted

543
00:24:14,520 --> 00:24:16,240
Speaker 1: to mention, Like, we're talking about the number of kids

544
00:24:16,240 --> 00:24:18,200
Speaker 1: to have one point eight that's actually I think that's

545
00:24:18,200 --> 00:24:20,920
Speaker 1: the same number of vehicles on average that the US

546
00:24:20,960 --> 00:24:23,679
Speaker 1: household has in their driveway or in their garage, and

547
00:24:23,720 --> 00:24:26,679
Speaker 1: so most houses have at least two vehicles, and so

548
00:24:26,720 --> 00:24:29,199
Speaker 1: everything that we're discussing here, uh, the impacts are going

549
00:24:29,240 --> 00:24:31,639
Speaker 1: to be felt twofold, and so if that is you,

550
00:24:31,840 --> 00:24:34,520
Speaker 1: it is I think worth paying even closer attention to

551
00:24:34,560 --> 00:24:37,600
Speaker 1: this conversation. So it really does come down to the

552
00:24:37,640 --> 00:24:40,000
Speaker 1: total cost of ownership, not just looking at the sticker price,

553
00:24:40,040 --> 00:24:43,840
Speaker 1: but also the actual cost of repairs. We actually talked

554
00:24:43,840 --> 00:24:46,720
Speaker 1: about this recently in episode five seven, but we talked

555
00:24:46,760 --> 00:24:50,760
Speaker 1: about the secondary costs of every purchase matter more than

556
00:24:50,800 --> 00:24:52,359
Speaker 1: we like to think. It kind of hinted at that

557
00:24:52,359 --> 00:24:54,560
Speaker 1: when you mentioned the pony at the at the top

558
00:24:54,600 --> 00:24:57,560
Speaker 1: of the episode. But your decision to as to what

559
00:24:57,680 --> 00:25:00,000
Speaker 1: kind of car you're gonna buy will likely come down

560
00:25:00,000 --> 00:25:02,120
Speaker 1: into a whole lot more than just money. Because if

561
00:25:02,160 --> 00:25:05,200
Speaker 1: money were the only consideration, you know, if a four

562
00:25:05,280 --> 00:25:08,080
Speaker 1: to five dollar used Honda or used Toyota is going

563
00:25:08,119 --> 00:25:10,959
Speaker 1: to be the slam dunk decision. But if you're in

564
00:25:10,960 --> 00:25:13,720
Speaker 1: your car a ton maybe like like ten to twelve

565
00:25:13,760 --> 00:25:15,760
Speaker 1: hours a week, it's a good chance that you're gonna

566
00:25:15,800 --> 00:25:18,920
Speaker 1: care more about your car offering you some sort of

567
00:25:18,960 --> 00:25:22,119
Speaker 1: comfort and style. Uh, it is okay if that is you,

568
00:25:22,160 --> 00:25:24,000
Speaker 1: It is okay if that's what you value. If you

569
00:25:24,160 --> 00:25:26,399
Speaker 1: value your car more than Joldas or even more than

570
00:25:26,440 --> 00:25:28,360
Speaker 1: I do. But just make sure that you're making your

571
00:25:28,359 --> 00:25:30,960
Speaker 1: purchase intentionally, that you're doing it on purpose, and that

572
00:25:31,000 --> 00:25:33,880
Speaker 1: you're not just buying a thirty to forty thousand dollar

573
00:25:33,920 --> 00:25:35,960
Speaker 1: car just because you're your friends and your coworkers are

574
00:25:35,960 --> 00:25:38,080
Speaker 1: doing it. The average car payment, it really is something

575
00:25:38,080 --> 00:25:40,800
Speaker 1: in the six and fifty dollar a month range. Uh.

576
00:25:40,840 --> 00:25:44,320
Speaker 1: They typically last for six years. This is what we

577
00:25:44,400 --> 00:25:46,879
Speaker 1: want you to avoid if it's truly not something that

578
00:25:46,920 --> 00:25:48,479
Speaker 1: you care all that much about. Yeah, when you think

579
00:25:48,480 --> 00:25:51,359
Speaker 1: about six d fifty times six years, you're talking about

580
00:25:51,359 --> 00:25:53,679
Speaker 1: an awful lot of money, and you're talking about you

581
00:25:53,720 --> 00:25:56,560
Speaker 1: could buy a car that costs a fraction of that,

582
00:25:57,080 --> 00:25:59,520
Speaker 1: and and then you might have to worry less about

583
00:26:00,000 --> 00:26:01,639
Speaker 1: them of that depth that's been lingering because you can

584
00:26:01,640 --> 00:26:03,159
Speaker 1: pay it off. And then you might have to worry

585
00:26:03,400 --> 00:26:05,320
Speaker 1: less about not being able to take a vacation because

586
00:26:05,320 --> 00:26:07,000
Speaker 1: you actually can, And then you might have I mean,

587
00:26:07,040 --> 00:26:09,280
Speaker 1: there's all of these like domino effects Matt of spending

588
00:26:09,320 --> 00:26:12,399
Speaker 1: less money on a car. Most people just assume that

589
00:26:12,440 --> 00:26:16,040
Speaker 1: they have to upgrade to something like car, but they

590
00:26:16,080 --> 00:26:18,239
Speaker 1: don't realize that the trade offs they're making when they

591
00:26:18,280 --> 00:26:21,240
Speaker 1: do that. One of the things that Jesse mentioned leasing

592
00:26:21,240 --> 00:26:22,920
Speaker 1: in his question. Let's touch on it real quick. It's

593
00:26:22,920 --> 00:26:26,200
Speaker 1: something that you and I we never really recommend choosing

594
00:26:26,320 --> 00:26:28,880
Speaker 1: to lease a car. It's it's more of a lifestyle move.

595
00:26:28,960 --> 00:26:30,600
Speaker 1: We would say. You know, if you know you're the

596
00:26:30,640 --> 00:26:33,240
Speaker 1: kind of person who values cars a whole lot and

597
00:26:33,280 --> 00:26:35,000
Speaker 1: you just want a new one every two to three years,

598
00:26:35,280 --> 00:26:38,040
Speaker 1: leasing is probably the best choice. But it doesn't mean

599
00:26:38,040 --> 00:26:40,160
Speaker 1: that it's a good financial move. It's just a good

600
00:26:40,200 --> 00:26:42,800
Speaker 1: move because that's how you treat cars, that's how you

601
00:26:42,800 --> 00:26:45,360
Speaker 1: think about them, that's how you want to consume them, exactly.

602
00:26:45,359 --> 00:26:48,160
Speaker 1: Really is like a consumption luxury good at that point,

603
00:26:48,240 --> 00:26:50,879
Speaker 1: exactly exactly. So it's one of those things where for

604
00:26:51,960 --> 00:26:54,919
Speaker 1: folks avoid it all together, but for that one percent

605
00:26:55,400 --> 00:26:58,400
Speaker 1: go for it. And yeah, again, there are other considerations

606
00:26:58,400 --> 00:27:00,439
Speaker 1: that we all have to make that go beyond me. Right,

607
00:27:00,600 --> 00:27:03,400
Speaker 1: And so don't just buy a four thousand dollar car

608
00:27:03,440 --> 00:27:05,160
Speaker 1: because Matt and Joel told you to do it. But

609
00:27:05,359 --> 00:27:08,520
Speaker 1: for a lot of folks who prize the idea of

610
00:27:08,560 --> 00:27:11,600
Speaker 1: financial independence and want to get there sooner rather than

611
00:27:11,720 --> 00:27:15,000
Speaker 1: later and want more flexibility in their lives, paying less

612
00:27:15,040 --> 00:27:17,439
Speaker 1: for a car is going to move the needle in

613
00:27:17,440 --> 00:27:21,080
Speaker 1: a big way on your ability to build wealth more quickly. So, Jesse,

614
00:27:21,280 --> 00:27:23,080
Speaker 1: our friend, thank you so much for the question. Man,

615
00:27:23,160 --> 00:27:25,080
Speaker 1: And and and we'll actually post a link to one

616
00:27:25,080 --> 00:27:27,359
Speaker 1: of Jesse's articles in the show notes. He does a

617
00:27:27,400 --> 00:27:30,440
Speaker 1: really good job addressing the total cost of ownership, which

618
00:27:30,480 --> 00:27:32,679
Speaker 1: is what you really want to think through, not just

619
00:27:32,760 --> 00:27:34,920
Speaker 1: the sticker price. Like you said, Matt, Yeah, he did

620
00:27:34,920 --> 00:27:36,639
Speaker 1: a nice deep dive, and we will link to that

621
00:27:36,680 --> 00:27:38,920
Speaker 1: in our show notes. Let's get to our next question,

622
00:27:39,280 --> 00:27:41,440
Speaker 1: And this one comes from a listener who has an

623
00:27:41,480 --> 00:27:43,920
Speaker 1: irregular income. How are you supposed to budget when that's

624
00:27:43,920 --> 00:27:46,800
Speaker 1: the case? Hi, how the money? My name is Annie

625
00:27:46,800 --> 00:27:49,359
Speaker 1: and I live in Orlando, Florida. As I grown my

626
00:27:49,440 --> 00:27:52,479
Speaker 1: own business, I bartend on the side. There are so

627
00:27:52,520 --> 00:27:54,639
Speaker 1: many great budget tips out there, but I feel like

628
00:27:54,760 --> 00:27:58,440
Speaker 1: very few pertain to fluid incomes, for example, those that

629
00:27:58,520 --> 00:28:02,160
Speaker 1: are a tip based or alliance on overtime. Any specific

630
00:28:02,160 --> 00:28:05,040
Speaker 1: advice for a household with fluid income from months to months?

631
00:28:05,560 --> 00:28:08,679
Speaker 1: All right, Matt, another question from a small business owner today.

632
00:28:08,840 --> 00:28:11,080
Speaker 1: I appreciate that. I think it's great. And Annie, thank

633
00:28:11,080 --> 00:28:14,119
Speaker 1: you so much for submitting that one. I love the spirit, Matt,

634
00:28:14,480 --> 00:28:16,919
Speaker 1: of entrepreneurship that kind of seems to be waking in

635
00:28:16,960 --> 00:28:18,800
Speaker 1: a whole lot of folks right now, the kind of

636
00:28:18,800 --> 00:28:23,080
Speaker 1: realization that it's there's not necessarily some abstract job market

637
00:28:23,119 --> 00:28:24,719
Speaker 1: that you have to jump into, but that you can

638
00:28:24,760 --> 00:28:27,600
Speaker 1: kind of create your own opportunity. You can become your

639
00:28:27,600 --> 00:28:30,200
Speaker 1: own boss. More people are doing it, you know, working

640
00:28:30,200 --> 00:28:33,760
Speaker 1: for yourself, setting your own hours, gaining more flexibility. It's

641
00:28:33,800 --> 00:28:37,040
Speaker 1: something that we're big proponents of. But I also want

642
00:28:37,040 --> 00:28:39,240
Speaker 1: to give one note of caution because you know, while

643
00:28:39,240 --> 00:28:42,360
Speaker 1: we completely agree that those are some of the benefits

644
00:28:42,440 --> 00:28:45,280
Speaker 1: you gain when you're self employed, there are also other

645
00:28:45,400 --> 00:28:47,960
Speaker 1: trade offs that you make on the downside, right, the

646
00:28:48,000 --> 00:28:50,320
Speaker 1: things that you lose when you become self employed, like

647
00:28:50,480 --> 00:28:53,960
Speaker 1: actual benefits that maybe your employer used to provide your

648
00:28:54,080 --> 00:28:57,640
Speaker 1: now paying for your own health insurance, and you've got

649
00:28:57,640 --> 00:29:00,520
Speaker 1: to fully fund your own retirement accounts. And so while

650
00:29:00,560 --> 00:29:04,239
Speaker 1: we are all about entrepreneurship, the grass isn't always uh

651
00:29:04,720 --> 00:29:07,880
Speaker 1: greener on the other side, there are still dry patches

652
00:29:07,960 --> 00:29:10,200
Speaker 1: that you're gonna have to kind of fill in on

653
00:29:10,280 --> 00:29:12,480
Speaker 1: your own. Yeah, that's true. We don't want to blindly

654
00:29:12,480 --> 00:29:16,120
Speaker 1: promote this cult of working for yourself. Uh. And of course,

655
00:29:16,400 --> 00:29:18,480
Speaker 1: one of the downslides to owning your own business is

656
00:29:18,520 --> 00:29:21,080
Speaker 1: the likelihood that you're going to have some irregular income.

657
00:29:21,360 --> 00:29:22,959
Speaker 1: And so one of the ways to smooth out those

658
00:29:23,000 --> 00:29:26,480
Speaker 1: bumps in the road any is by tweaking your expenses

659
00:29:26,600 --> 00:29:28,800
Speaker 1: so that you don't find yourself going over budget when

660
00:29:28,800 --> 00:29:31,880
Speaker 1: you don't have enough income. Back in episode three sixty two,

661
00:29:31,920 --> 00:29:35,240
Speaker 1: we talked about why it is essential to create a

662
00:29:35,280 --> 00:29:38,680
Speaker 1: bare bones budget. We specifically talked about how everyone needs

663
00:29:38,680 --> 00:29:40,960
Speaker 1: one of these because you could get let go from

664
00:29:40,960 --> 00:29:42,800
Speaker 1: a job, even if you think you have the most

665
00:29:42,920 --> 00:29:46,280
Speaker 1: stable position in the world. But bare bones budgets can

666
00:29:46,360 --> 00:29:50,040
Speaker 1: also be incredibly helpful when it comes to minor life events,

667
00:29:50,080 --> 00:29:53,080
Speaker 1: like when you're just making slightly less during a particular month.

668
00:29:53,200 --> 00:29:55,760
Speaker 1: It doesn't have to be a full blown emergency where

669
00:29:55,960 --> 00:29:58,440
Speaker 1: you're fired, you know, and in some sort of dramatic fashion.

670
00:29:58,920 --> 00:30:01,360
Speaker 1: But essentially what we're talking about here is having some

671
00:30:01,800 --> 00:30:05,120
Speaker 1: flexibility when it comes to your monthly expenses like paying

672
00:30:05,160 --> 00:30:07,160
Speaker 1: rent or paying your mortgage payment. There's not going to

673
00:30:07,200 --> 00:30:10,200
Speaker 1: be much flexibility there, but there's a wide range of

674
00:30:10,240 --> 00:30:12,920
Speaker 1: what you could be spending, for instance, on food every

675
00:30:12,920 --> 00:30:16,280
Speaker 1: single month, right it's it is possible to eat a healthy,

676
00:30:16,320 --> 00:30:19,600
Speaker 1: balanced meal that's costing you one dollar per person per meal,

677
00:30:20,280 --> 00:30:23,200
Speaker 1: or on the other hand, you could spend ten times that. Uh.

678
00:30:23,200 --> 00:30:25,560
Speaker 1: And so in the areas where you do have some

679
00:30:25,640 --> 00:30:28,280
Speaker 1: wiggle room, where you do have some flexibility, is going

680
00:30:28,320 --> 00:30:30,880
Speaker 1: to be clutch when it comes to finding some of

681
00:30:30,880 --> 00:30:34,120
Speaker 1: the different creative ways to reduce your monthly expenses. And

682
00:30:34,280 --> 00:30:38,440
Speaker 1: if people think that one dollar per person meals are impossible,

683
00:30:38,760 --> 00:30:41,160
Speaker 1: go back and listen to our episode with Leanne Brown earlier.

684
00:30:41,360 --> 00:30:43,680
Speaker 1: Was it earlier this year? I think in January? And

685
00:30:43,920 --> 00:30:46,920
Speaker 1: she has literally a cookbook where you can eat well

686
00:30:47,000 --> 00:30:49,920
Speaker 1: on four dollars a day. And so it's one of

687
00:30:49,920 --> 00:30:53,520
Speaker 1: those things where it sounds ridiculous but it's actually possible.

688
00:30:53,760 --> 00:30:56,040
Speaker 1: And so, yeah, bare bones budget can help you give

689
00:30:56,080 --> 00:30:59,120
Speaker 1: you a lot of confidence as you're moving forward, even

690
00:30:59,320 --> 00:31:01,400
Speaker 1: in a tight month. It can help you cut back

691
00:31:01,400 --> 00:31:03,640
Speaker 1: on your spending a lot more easily. And then on

692
00:31:03,680 --> 00:31:06,520
Speaker 1: the other side of the equation amount on the income side,

693
00:31:06,720 --> 00:31:09,400
Speaker 1: and he's gonna want to even out her income. If

694
00:31:09,400 --> 00:31:12,200
Speaker 1: you can literally do this, then great, but that's not

695
00:31:12,240 --> 00:31:15,560
Speaker 1: really possible for many businesses, right, And and so I'm

696
00:31:15,560 --> 00:31:18,360
Speaker 1: sure if any If she could, she would have been like, well, yeah, guys, uh,

697
00:31:18,600 --> 00:31:21,240
Speaker 1: I would love to boost my income business, but this

698
00:31:21,280 --> 00:31:23,200
Speaker 1: company wants to pay me this much in March, and

699
00:31:23,240 --> 00:31:25,200
Speaker 1: this company wants to pay me this much in August,

700
00:31:25,240 --> 00:31:27,600
Speaker 1: and there's no way that I can fix that and

701
00:31:27,640 --> 00:31:30,240
Speaker 1: getting to pay me over twelve months of course. And

702
00:31:30,320 --> 00:31:32,840
Speaker 1: so yeah, your your goal should be to artificially do

703
00:31:32,920 --> 00:31:35,880
Speaker 1: this by simply creating a larger income cushion. And you

704
00:31:35,920 --> 00:31:38,760
Speaker 1: can accomplish this by having a larger amount of cash

705
00:31:39,200 --> 00:31:42,680
Speaker 1: stashed away in savings. So for example, let's say you

706
00:31:42,760 --> 00:31:44,800
Speaker 1: used to be a regular w two way journal with

707
00:31:44,840 --> 00:31:48,000
Speaker 1: a steady paycheck. That's when a three to six months

708
00:31:48,440 --> 00:31:51,200
Speaker 1: worth of savings, that emergency fund worked for you. But

709
00:31:51,240 --> 00:31:54,160
Speaker 1: now with a more variable income, maybe making that cushion

710
00:31:54,240 --> 00:31:55,920
Speaker 1: a bit thicker so you have more like six to

711
00:31:56,040 --> 00:32:00,320
Speaker 1: nine months of expenses is a better move in her life. Actually,

712
00:32:00,440 --> 00:32:02,680
Speaker 1: when when things are more irregular, you want more of

713
00:32:02,680 --> 00:32:05,200
Speaker 1: a pad when you have something that's more steady. Let's

714
00:32:05,200 --> 00:32:07,840
Speaker 1: say you're you're a dual income household and you're getting

715
00:32:07,880 --> 00:32:10,920
Speaker 1: paychecks every two weeks with steady jobs, you can afford

716
00:32:10,960 --> 00:32:14,320
Speaker 1: to have more like a three month emergency fund. But yeah,

717
00:32:14,560 --> 00:32:17,560
Speaker 1: determining what that dollar amount is so that you can

718
00:32:17,600 --> 00:32:19,479
Speaker 1: build up to it during the months where you're more

719
00:32:19,480 --> 00:32:23,320
Speaker 1: flush with cash. Well, then when those leaner months inevitably arrived,

720
00:32:23,520 --> 00:32:26,200
Speaker 1: you can rest assured knowing that you'll have enough on hand.

721
00:32:26,560 --> 00:32:29,760
Speaker 1: It reminds me of the biblical story Matt of Joseph

722
00:32:29,800 --> 00:32:32,280
Speaker 1: and the Egyptians, and he has this dream about seven

723
00:32:32,360 --> 00:32:36,440
Speaker 1: years of of plenty and then seven years of famine,

724
00:32:36,560 --> 00:32:40,480
Speaker 1: and so he's able to basically an Old Testament I am,

725
00:32:40,720 --> 00:32:43,840
Speaker 1: I am, So he's able to build these storehouses to

726
00:32:44,280 --> 00:32:46,240
Speaker 1: sock away. I think it was what it was, like

727
00:32:46,240 --> 00:32:49,880
Speaker 1: a seventh of everything that was harvested for for future

728
00:32:49,920 --> 00:32:52,920
Speaker 1: years for those famine years to ensure that they didn't

729
00:32:52,960 --> 00:32:55,040
Speaker 1: run out when time's got lean. And that's kind of

730
00:32:55,280 --> 00:32:57,360
Speaker 1: exactly what Annie needs to do. She needs to go

731
00:32:57,400 --> 00:33:00,880
Speaker 1: Old Testament with it, uh, I hoard some away while

732
00:33:00,880 --> 00:33:03,440
Speaker 1: things are good so that when things are crappy she's

733
00:33:03,520 --> 00:33:05,280
Speaker 1: got money to rely on. Yeah, but you definitely don't

734
00:33:05,280 --> 00:33:09,480
Speaker 1: want to go full Testament, but yeah, she does want

735
00:33:09,520 --> 00:33:11,600
Speaker 1: to kind of do this on a personal level, like

736
00:33:11,600 --> 00:33:13,520
Speaker 1: like essentially the way I see it, like we want

737
00:33:13,560 --> 00:33:16,880
Speaker 1: her to zoom out, because if she's only looking at

738
00:33:16,880 --> 00:33:19,200
Speaker 1: her expenses from week to week, or she's living paycheck

739
00:33:19,240 --> 00:33:22,160
Speaker 1: to paycheck, then it can be difficult to know what

740
00:33:22,200 --> 00:33:24,520
Speaker 1: direction you're going with your finances. And so we want

741
00:33:24,560 --> 00:33:26,280
Speaker 1: you to and we want you to kind of broaden

742
00:33:26,320 --> 00:33:28,520
Speaker 1: your scope and to look at not just weeks and months,

743
00:33:28,520 --> 00:33:31,040
Speaker 1: but like months and years. It's almost as if you're

744
00:33:31,040 --> 00:33:33,360
Speaker 1: a pilot, and if so, it's very important for you

745
00:33:33,400 --> 00:33:36,080
Speaker 1: to understand what all the dials mean. It's really important

746
00:33:36,080 --> 00:33:39,080
Speaker 1: for you to know how to make the specific maneuvers

747
00:33:39,120 --> 00:33:41,400
Speaker 1: when you're looking to launch the plane, when you lay

748
00:33:41,400 --> 00:33:43,040
Speaker 1: in the plane. I'm not a pilot, so I don't

749
00:33:43,040 --> 00:33:45,560
Speaker 1: know the right terminology here. But it is also I

750
00:33:45,560 --> 00:33:47,440
Speaker 1: think you just say, Siri, land the plane, and that's

751
00:33:47,440 --> 00:33:49,920
Speaker 1: how it works out. I bet it will want to

752
00:33:51,000 --> 00:33:53,400
Speaker 1: but you also need to just generally know what direction

753
00:33:53,440 --> 00:33:56,000
Speaker 1: you should be flying in because that will have a

754
00:33:56,040 --> 00:33:58,600
Speaker 1: pretty big impact on Okay, is the plan going in

755
00:33:58,600 --> 00:34:01,560
Speaker 1: the right direction. Even want to be able to simultaneously

756
00:34:01,560 --> 00:34:04,280
Speaker 1: have sort of like the CEO, I can see the

757
00:34:04,520 --> 00:34:07,760
Speaker 1: whole picture kind of mindset, while at the same time

758
00:34:07,840 --> 00:34:09,920
Speaker 1: you need to have the nimbleness and the skill to

759
00:34:09,920 --> 00:34:11,799
Speaker 1: be able to handle the day to day stuff, and

760
00:34:11,880 --> 00:34:13,560
Speaker 1: so kind of what we're talking about here is too,

761
00:34:13,640 --> 00:34:15,799
Speaker 1: is for you to take more of that CEO view

762
00:34:15,960 --> 00:34:18,360
Speaker 1: of your life, of your finances where you're able to

763
00:34:18,360 --> 00:34:20,520
Speaker 1: step back a little bit and not just look at

764
00:34:20,520 --> 00:34:23,560
Speaker 1: your bills or your expenses isolated within each month, but

765
00:34:23,640 --> 00:34:26,640
Speaker 1: maybe even look at them, uh within seasons, or to

766
00:34:26,719 --> 00:34:28,640
Speaker 1: even look at these goals and these expenses over the

767
00:34:28,840 --> 00:34:31,239
Speaker 1: course of a full year. We want you to zoom out,

768
00:34:31,360 --> 00:34:34,040
Speaker 1: so hopefully that gets you pointed in the right direction. Joel,

769
00:34:34,080 --> 00:34:36,640
Speaker 1: We've got a couple more questions to get to, including

770
00:34:36,719 --> 00:34:39,680
Speaker 1: one about one of our beloved retirement accounts. The Wrath

771
00:34:39,760 --> 00:34:41,960
Speaker 1: will get to that one plus one other right after this.

772
00:34:51,480 --> 00:34:53,440
Speaker 1: All right, we're back to the break and we do

773
00:34:53,480 --> 00:34:55,480
Speaker 1: have a question about roth Ira coming up in just

774
00:34:55,520 --> 00:34:58,400
Speaker 1: a second. But first we have an interesting question about

775
00:34:58,840 --> 00:35:01,200
Speaker 1: how to build a house so that it can actually

776
00:35:01,239 --> 00:35:05,520
Speaker 1: make money on your behalf. Hey guys, it's Luke in Woodbine, Maryland.

777
00:35:06,000 --> 00:35:08,080
Speaker 1: My wife and I are in the design phase of

778
00:35:08,120 --> 00:35:13,359
Speaker 1: building a home, likely a square foot rancher. We don't

779
00:35:13,360 --> 00:35:15,680
Speaker 1: have any kids now, but planned to in the future,

780
00:35:16,200 --> 00:35:19,640
Speaker 1: but in the meantime, we'd like to design one of

781
00:35:19,640 --> 00:35:23,160
Speaker 1: the rooms to be used as an Airbnb rental or

782
00:35:23,200 --> 00:35:26,440
Speaker 1: as a place for friends and family to stay. That

783
00:35:26,520 --> 00:35:29,600
Speaker 1: room would have its own exterior door, as well as

784
00:35:29,640 --> 00:35:34,440
Speaker 1: an interior door that, when closed, would separate that bedroom

785
00:35:34,640 --> 00:35:38,040
Speaker 1: and bathroom off from the rest of the living area.

786
00:35:38,239 --> 00:35:41,080
Speaker 1: Are there any good resources or tips that you have

787
00:35:41,480 --> 00:35:45,000
Speaker 1: from your experience doing Airbnb that would help us in

788
00:35:45,040 --> 00:35:49,080
Speaker 1: this design process? Thanks so much? All Right, Luke is

789
00:35:49,120 --> 00:35:52,840
Speaker 1: looking to make his new house more airbnbable, which is

790
00:35:52,880 --> 00:35:57,640
Speaker 1: a fun word to say. Uh, Luke. First, let's talk

791
00:35:57,640 --> 00:35:59,520
Speaker 1: about building at home for a second, because, like, I

792
00:35:59,600 --> 00:36:01,840
Speaker 1: get why people do it, but it is almost always

793
00:36:01,880 --> 00:36:04,400
Speaker 1: going to be more affordable to buy a home that

794
00:36:04,520 --> 00:36:07,120
Speaker 1: is already built, especially when we're talking about a home

795
00:36:07,200 --> 00:36:09,560
Speaker 1: on the smaller end of the size spectrum, like you're

796
00:36:09,560 --> 00:36:12,120
Speaker 1: thinking about. I'm not trying to derail your planes here

797
00:36:12,160 --> 00:36:14,800
Speaker 1: to design and build an awesome house, um, but I

798
00:36:14,840 --> 00:36:17,080
Speaker 1: would love for you to at least consider looking at

799
00:36:17,120 --> 00:36:19,440
Speaker 1: homes that are already on the market to see if

800
00:36:19,480 --> 00:36:22,439
Speaker 1: you could potentially find something that suits your needs. Uh.

801
00:36:22,480 --> 00:36:25,439
Speaker 1: That will also potentially cost you a lot less money

802
00:36:25,480 --> 00:36:27,920
Speaker 1: as well. Yeah, the cost of homes is obviously skyrocketed,

803
00:36:27,960 --> 00:36:30,319
Speaker 1: but the cost of building homes has gone up even more,

804
00:36:30,880 --> 00:36:33,440
Speaker 1: and so it's one of those things that it could

805
00:36:33,480 --> 00:36:36,360
Speaker 1: take you a really long time, especially with what's happening

806
00:36:36,440 --> 00:36:40,400
Speaker 1: in the supply and labor market for home materials and labor.

807
00:36:40,800 --> 00:36:43,399
Speaker 1: So Luke, it's one of those things where it might

808
00:36:43,440 --> 00:36:45,400
Speaker 1: be in your best interest or maybe you're doing some

809
00:36:45,440 --> 00:36:48,080
Speaker 1: of the work yourself, uh, and that's gonna help save

810
00:36:48,080 --> 00:36:49,920
Speaker 1: you some money and make it more feasible to get

811
00:36:49,960 --> 00:36:52,399
Speaker 1: the project done in a timely manner. But it's something

812
00:36:52,400 --> 00:36:54,479
Speaker 1: you put on your radar if you are hiring out

813
00:36:54,600 --> 00:36:56,440
Speaker 1: all the work. This could take a lot longer than

814
00:36:56,480 --> 00:36:58,400
Speaker 1: you play, and it could cost more money than you

815
00:36:58,440 --> 00:37:01,080
Speaker 1: thought it way wait until it's his his lumber package quote,

816
00:37:01,360 --> 00:37:03,200
Speaker 1: he's like, right, wit, that was the cost of the

817
00:37:03,440 --> 00:37:05,319
Speaker 1: original cost of the whole house. When he's trying to

818
00:37:05,640 --> 00:37:08,359
Speaker 1: now he's just talking about for the foundation and and

819
00:37:08,440 --> 00:37:11,560
Speaker 1: they're like, wait, concrete, you can get that in three months.

820
00:37:11,640 --> 00:37:13,400
Speaker 1: And you're like, wait a second, that's going to completely

821
00:37:13,440 --> 00:37:17,239
Speaker 1: derail the project, because yeah, there are legitimate issues in

822
00:37:17,280 --> 00:37:19,600
Speaker 1: the construction industry right now. But hopefully he's thought through

823
00:37:19,640 --> 00:37:22,680
Speaker 1: all these things, and Luke has a total understanding and

824
00:37:22,719 --> 00:37:25,560
Speaker 1: grasp as to not only the costs but the timeline

825
00:37:25,600 --> 00:37:27,239
Speaker 1: as well. I hope so, I hope so, But that

826
00:37:27,480 --> 00:37:29,960
Speaker 1: I think that bears saying. No matter I like what

827
00:37:29,960 --> 00:37:32,000
Speaker 1: you said, buying a used house as opposed to building

828
00:37:32,000 --> 00:37:34,000
Speaker 1: a new one makes the most sense for most people,

829
00:37:34,160 --> 00:37:37,000
Speaker 1: like these cars, like use houses. That's right, that's right exactly.

830
00:37:37,040 --> 00:37:39,360
Speaker 1: So let's let's talk about what you want out of

831
00:37:39,360 --> 00:37:41,680
Speaker 1: that property, and you know, whether you're building it or

832
00:37:41,719 --> 00:37:44,120
Speaker 1: you're buying it from someone else, And we would say

833
00:37:44,200 --> 00:37:47,040
Speaker 1: that the best way to make money on Airbnb is

834
00:37:47,040 --> 00:37:50,239
Speaker 1: to have a fully separate space that's either attached or

835
00:37:50,320 --> 00:37:53,000
Speaker 1: detached from your primary home. You know, whether whether it's

836
00:37:53,000 --> 00:37:55,840
Speaker 1: an above garage apartment or an a d U or

837
00:37:56,200 --> 00:37:59,160
Speaker 1: a fully separate basement apartment, you know you're gonna typically

838
00:37:59,160 --> 00:38:01,279
Speaker 1: make more money if you opt to rent out a

839
00:38:01,320 --> 00:38:04,160
Speaker 1: space that is completely separate. Uh. Then if you're just

840
00:38:04,239 --> 00:38:06,480
Speaker 1: running out a room, and granted it, it sounds like

841
00:38:06,520 --> 00:38:08,120
Speaker 1: you're you're trying to get the best of both worlds

842
00:38:08,120 --> 00:38:10,319
Speaker 1: with an exterior and an interior door. But I just

843
00:38:10,320 --> 00:38:12,359
Speaker 1: want to put that out there because some people maybe

844
00:38:12,400 --> 00:38:16,400
Speaker 1: don't feel as comfortable if their space isn't necessarily completely separate.

845
00:38:16,400 --> 00:38:18,520
Speaker 1: If it feels more like you're running a room, then

846
00:38:18,640 --> 00:38:21,279
Speaker 1: you're running a private apartment. That's right. Yeah. And so

847
00:38:21,360 --> 00:38:24,120
Speaker 1: as you are going through the process of building the home,

848
00:38:24,160 --> 00:38:26,120
Speaker 1: I think one of the things that's worth mentioning here

849
00:38:26,320 --> 00:38:30,040
Speaker 1: is how you want to acoustically insulate the space that

850
00:38:30,080 --> 00:38:33,320
Speaker 1: you are looking to rent. A big words Matthew acoustically insulate.

851
00:38:33,360 --> 00:38:36,880
Speaker 1: And so oftentimes builders, uh, interior walls are typically going

852
00:38:36,920 --> 00:38:40,760
Speaker 1: to be hollow. That's a cost saving measure because essentially

853
00:38:41,000 --> 00:38:43,440
Speaker 1: builders are often thinking about thermal insulation, right, and so

854
00:38:43,480 --> 00:38:46,120
Speaker 1: you put insulation within your exterior walls as you are

855
00:38:46,200 --> 00:38:48,880
Speaker 1: trying to keep the elements Uh. Specifically, I guess the

856
00:38:48,880 --> 00:38:51,239
Speaker 1: temperatures to remain on the inside and the temperatures on

857
00:38:51,239 --> 00:38:53,120
Speaker 1: the outside to stay out there. But now as you

858
00:38:53,160 --> 00:38:55,560
Speaker 1: are looking to have guests, as you're looking at renters

859
00:38:55,560 --> 00:38:57,839
Speaker 1: to pay to stay in your space, you want them

860
00:38:57,880 --> 00:38:59,680
Speaker 1: to have a sense of privacy, right, Like you don't

861
00:38:59,719 --> 00:39:01,920
Speaker 1: necessar they really like, they're gonna feel the most comfortable,

862
00:39:01,960 --> 00:39:04,520
Speaker 1: They're gonna leave you the best reviews on Airbnb. If

863
00:39:04,520 --> 00:39:06,239
Speaker 1: they can't hear you over on your side of the

864
00:39:06,280 --> 00:39:09,360
Speaker 1: house and vice versa. Uh, you don't necessarily want to

865
00:39:09,400 --> 00:39:11,560
Speaker 1: be hanging out with your partner or your wife or

866
00:39:11,719 --> 00:39:13,600
Speaker 1: or have a friend over for dinner and have the

867
00:39:13,640 --> 00:39:17,359
Speaker 1: Airbnb thumping in the background where there's a party going down.

868
00:39:17,440 --> 00:39:20,520
Speaker 1: Oh is that that new Kendrick album? Oh? Yeah. And

869
00:39:20,600 --> 00:39:22,959
Speaker 1: so the way that you do this is through rock

870
00:39:23,000 --> 00:39:26,600
Speaker 1: Will specifically, Like you can use fiberglass insulation as well,

871
00:39:26,600 --> 00:39:30,759
Speaker 1: but rock Will is amazing at reducing the decibels the

872
00:39:30,800 --> 00:39:34,000
Speaker 1: noise level coming from the insulated space. So what you're

873
00:39:34,000 --> 00:39:37,120
Speaker 1: recommending is Matt he was talking about a door between

874
00:39:37,520 --> 00:39:40,399
Speaker 1: the main house and this unit that he'd be running out.

875
00:39:40,440 --> 00:39:43,279
Speaker 1: What you're saying is instead of that door, put up

876
00:39:43,280 --> 00:39:45,560
Speaker 1: some dry wall, but put some actual like rock Will

877
00:39:45,600 --> 00:39:47,799
Speaker 1: insulation in that interior wall. Yeah. Yeah, I mean he

878
00:39:47,800 --> 00:39:49,320
Speaker 1: could definitely do that, But I mean, and then eventually

879
00:39:49,320 --> 00:39:50,520
Speaker 1: you can take that out and put a door in

880
00:39:50,600 --> 00:39:52,840
Speaker 1: once you convert it back to a single family. But

881
00:39:53,080 --> 00:39:55,000
Speaker 1: I also see the advantage of having an actual door

882
00:39:55,040 --> 00:39:58,480
Speaker 1: in there, right because having flip spaces, if there's a desire,

883
00:39:58,560 --> 00:40:01,000
Speaker 1: there's there's a convenience to I have to go outside,

884
00:40:01,600 --> 00:40:03,080
Speaker 1: like say it's raining or in the winter, it kind

885
00:40:03,080 --> 00:40:04,880
Speaker 1: of sucks to have to go outside them back inside.

886
00:40:05,120 --> 00:40:07,359
Speaker 1: The ability to just maybe cut through and into your door,

887
00:40:07,600 --> 00:40:09,799
Speaker 1: I get that desire, but I guess on that note

888
00:40:09,840 --> 00:40:12,359
Speaker 1: as well, it's worth splurging a little bit more on

889
00:40:12,400 --> 00:40:14,480
Speaker 1: a solid core door. So like a solid wood door

890
00:40:14,800 --> 00:40:18,400
Speaker 1: versus uh, newer, more affordable doors are gonna be hollow

891
00:40:18,640 --> 00:40:21,000
Speaker 1: and so in the same way, sound travels really well

892
00:40:21,000 --> 00:40:23,080
Speaker 1: through air, and so if you did want to have

893
00:40:23,120 --> 00:40:25,520
Speaker 1: a door there, making sure that you are splurging a

894
00:40:25,560 --> 00:40:28,080
Speaker 1: little bit and upgrading to get a solid core door,

895
00:40:28,160 --> 00:40:30,560
Speaker 1: that could definitely be a way to cut down on noise.

896
00:40:30,600 --> 00:40:32,239
Speaker 1: But like like you said though, too, I think there

897
00:40:32,320 --> 00:40:34,160
Speaker 1: is a way that you could potentially design the space

898
00:40:34,400 --> 00:40:36,600
Speaker 1: so that when the time did come for you to

899
00:40:36,680 --> 00:40:40,000
Speaker 1: take over that that separate little apartment, you could potentially

900
00:40:40,600 --> 00:40:43,040
Speaker 1: just cut out a doorway popping a door there, and

901
00:40:43,080 --> 00:40:45,960
Speaker 1: then you can easily incorporate that space back into your home.

902
00:40:46,120 --> 00:40:48,319
Speaker 1: But definitely, no matter what look into rock will, it's

903
00:40:48,320 --> 00:40:52,759
Speaker 1: gonna cost you, maybe like more than fiberglass insulation. But

904
00:40:52,840 --> 00:40:55,240
Speaker 1: since we're probably only talking about a you know, filling

905
00:40:55,280 --> 00:40:58,120
Speaker 1: a few walls, this is going to go a long way.

906
00:40:58,400 --> 00:41:01,480
Speaker 1: In acoustically isolating that space. I'm not going to get

907
00:41:01,480 --> 00:41:04,719
Speaker 1: into mass loaded vinyl. I'm not going to get into

908
00:41:04,760 --> 00:41:07,000
Speaker 1: isolation tracks. There are all these methods. Like I learned

909
00:41:07,000 --> 00:41:09,319
Speaker 1: all of this when it came to building out our

910
00:41:09,400 --> 00:41:12,400
Speaker 1: airbnb firmly known as the How To Money Studio at

911
00:41:12,400 --> 00:41:14,680
Speaker 1: our old house. But we went through all of these

912
00:41:14,680 --> 00:41:17,440
Speaker 1: measures there. We installed rock will, we doubled up on drywall.

913
00:41:17,480 --> 00:41:20,880
Speaker 1: We included acoustic glue or acoustic gel to go in

914
00:41:20,920 --> 00:41:23,440
Speaker 1: between multiple sheets of drywall. These are all things. These

915
00:41:23,440 --> 00:41:25,360
Speaker 1: are all measures that you can take within the construction

916
00:41:25,400 --> 00:41:28,640
Speaker 1: process to make sure that your guests and you have

917
00:41:28,719 --> 00:41:30,919
Speaker 1: a sense of privacy well. And this is gonna suit

918
00:41:31,040 --> 00:41:34,480
Speaker 1: Luca and and his partner well when they have kids,

919
00:41:34,520 --> 00:41:37,160
Speaker 1: because if that kid starts yelling and screaming or is

920
00:41:37,200 --> 00:41:40,040
Speaker 1: having a tough time sleeping, there's gonna be some insulation

921
00:41:40,080 --> 00:41:43,520
Speaker 1: factor to prevent you from hearing that young one when

922
00:41:43,520 --> 00:41:46,400
Speaker 1: that eventually becomes their room. A couple more things to consider.

923
00:41:46,440 --> 00:41:48,520
Speaker 1: One or the amenities. You know, you might not be

924
00:41:48,560 --> 00:41:52,040
Speaker 1: building an actual kitchen in their luke, but it's important

925
00:41:52,040 --> 00:41:54,360
Speaker 1: to put in like a small fridge, a microwave, and

926
00:41:54,400 --> 00:41:56,400
Speaker 1: a hot plate because yeah, I don't know, maybe you

927
00:41:56,400 --> 00:41:58,160
Speaker 1: can be like off the bathroom just a little bit

928
00:41:58,239 --> 00:42:01,120
Speaker 1: or something. Because if folks are coming for longer stays,

929
00:42:01,160 --> 00:42:03,400
Speaker 1: some of your tenants are gonna want the ability to

930
00:42:03,480 --> 00:42:05,359
Speaker 1: cook their own food. And more and more people are

931
00:42:05,360 --> 00:42:09,280
Speaker 1: booking longer stays these days, so so not having anything

932
00:42:09,320 --> 00:42:11,880
Speaker 1: to cook with is going to limit your potential guests,

933
00:42:12,040 --> 00:42:14,160
Speaker 1: and it's going to limit their ability or desire to

934
00:42:14,160 --> 00:42:16,960
Speaker 1: stay for longer periods of time. And it's also important

935
00:42:17,000 --> 00:42:19,960
Speaker 1: to plan more storage than you think is typically necessary.

936
00:42:20,120 --> 00:42:22,759
Speaker 1: You know, places to put extra towels or extra blankets,

937
00:42:22,960 --> 00:42:24,880
Speaker 1: a place to store luggage or to hang up close.

938
00:42:25,239 --> 00:42:26,680
Speaker 1: Those are the kind of things you want to think

939
00:42:26,680 --> 00:42:29,080
Speaker 1: about when you're building out an Airbnb space. Yeah, and

940
00:42:29,120 --> 00:42:31,359
Speaker 1: don't forget to check and see what your local municipality

941
00:42:31,440 --> 00:42:34,399
Speaker 1: rules are when it comes to short term rentals as well,

942
00:42:34,680 --> 00:42:37,680
Speaker 1: they're constantly influx. A friend of ours who's got an

943
00:42:37,680 --> 00:42:40,360
Speaker 1: airbnb up in Chattanooga. He was thinking about adding another,

944
00:42:40,600 --> 00:42:42,719
Speaker 1: but it turns out the city isn't accepting any new

945
00:42:42,719 --> 00:42:45,520
Speaker 1: applications right now, so he'd be forced to rent it

946
00:42:45,560 --> 00:42:47,880
Speaker 1: long term at least for the time being. If he

947
00:42:48,000 --> 00:42:50,640
Speaker 1: purchased something like that. Other cities and counties out there

948
00:42:50,800 --> 00:42:54,400
Speaker 1: charge ongoing fees and taxes if you decide to participate

949
00:42:54,440 --> 00:42:57,080
Speaker 1: in the short term rental economy. Now that doesn't mean

950
00:42:57,080 --> 00:42:58,759
Speaker 1: that it can be lucrative, but it's crucial to go

951
00:42:58,800 --> 00:43:01,240
Speaker 1: into this with your eyes wide open. And Atlanta recently

952
00:43:01,520 --> 00:43:05,120
Speaker 1: implemented their short term rental license. I think there's a

953
00:43:05,160 --> 00:43:08,200
Speaker 1: really small fee associated with it, but you definitely want

954
00:43:08,200 --> 00:43:09,680
Speaker 1: to know what the rules are so that you can

955
00:43:09,719 --> 00:43:12,960
Speaker 1: incorporate this as you are, as you're planning ahead. Yeah,

956
00:43:12,960 --> 00:43:14,879
Speaker 1: and it sounds like Luke has an alternate future plan.

957
00:43:15,280 --> 00:43:17,719
Speaker 1: This airbnb model is not something that he's planning to

958
00:43:17,760 --> 00:43:21,040
Speaker 1: do forever. But for some folks who are well, the

959
00:43:21,120 --> 00:43:23,799
Speaker 1: rules can change, and it's important to know that, Well,

960
00:43:23,840 --> 00:43:25,840
Speaker 1: if the rules change, how are you going to pivot?

961
00:43:25,920 --> 00:43:27,919
Speaker 1: It's you should have a plan B in mind as well.

962
00:43:28,239 --> 00:43:30,280
Speaker 1: All Right, Matt, let's get to our our last question

963
00:43:30,320 --> 00:43:33,839
Speaker 1: of this episode. This one is about taking out contributions

964
00:43:33,840 --> 00:43:36,560
Speaker 1: that you've made to a retirement account. Hi' ma and Ngel,

965
00:43:37,160 --> 00:43:39,920
Speaker 1: this is Chris from your hometown of Atlanta. Now, you've

966
00:43:40,000 --> 00:43:42,520
Speaker 1: mentioned a number of times on your podcast about being

967
00:43:42,560 --> 00:43:44,719
Speaker 1: able to take out the amount you contributed to a

968
00:43:44,800 --> 00:43:48,040
Speaker 1: roth IRA without penalty. The only problem is there doesn't

969
00:43:48,040 --> 00:43:50,040
Speaker 1: seem to be an easy way to know how much

970
00:43:50,120 --> 00:43:53,360
Speaker 1: you've contributed. Closest thing I found was some I r

971
00:43:53,480 --> 00:43:56,799
Speaker 1: S site where you could download transcripts for each year

972
00:43:56,840 --> 00:43:59,040
Speaker 1: back to two thousand eleven or so, and then I

973
00:43:59,040 --> 00:44:01,680
Speaker 1: add them all up. Seemed a bit error prone, and

974
00:44:01,719 --> 00:44:05,080
Speaker 1: I'm not sure if this even shows anything taken out previously.

975
00:44:05,640 --> 00:44:07,919
Speaker 1: Here's my question. Is there an easy way to see

976
00:44:07,960 --> 00:44:09,879
Speaker 1: what the I R S c s as roth IRA

977
00:44:10,080 --> 00:44:13,719
Speaker 1: contributions and withdrawals. I love your show, Keep up the

978
00:44:13,719 --> 00:44:17,000
Speaker 1: good work. I keep encouraging others to tune in. All right,

979
00:44:17,120 --> 00:44:18,960
Speaker 1: thank you so much for spreading the word, Chris. We

980
00:44:19,040 --> 00:44:21,080
Speaker 1: really appreciate it, and it's also really fun to have

981
00:44:21,120 --> 00:44:24,240
Speaker 1: another question from a listener here in our home city

982
00:44:24,280 --> 00:44:27,239
Speaker 1: of Atlanta. To questions, but Chris, first to talk for

983
00:44:27,280 --> 00:44:29,759
Speaker 1: a second about the flexibility of the RATH because the

984
00:44:29,840 --> 00:44:33,560
Speaker 1: fact that you can take out those contributions if you,

985
00:44:33,719 --> 00:44:35,759
Speaker 1: if need be. This is one of our favorite things

986
00:44:35,800 --> 00:44:38,600
Speaker 1: about this particular investment account because they can act as

987
00:44:38,960 --> 00:44:42,640
Speaker 1: this additional back up to your savings. So, for instance,

988
00:44:42,719 --> 00:44:45,200
Speaker 1: let's say you lost your job, or you stumble upon

989
00:44:45,280 --> 00:44:48,040
Speaker 1: some hard economic times, the money that you've talked in

990
00:44:48,120 --> 00:44:51,400
Speaker 1: your wrath Ira is accessible to help you through that

991
00:44:51,520 --> 00:44:54,120
Speaker 1: rough patch. And so folks have been steadily contributing to

992
00:44:54,239 --> 00:44:56,600
Speaker 1: a roth Ira for a number of years. It's really

993
00:44:56,640 --> 00:44:59,359
Speaker 1: helpful to know that you've got a decent chunk that

994
00:44:59,440 --> 00:45:02,200
Speaker 1: you could ta if you need to. That's true. I

995
00:45:02,239 --> 00:45:04,000
Speaker 1: love that peace of mind. But at the same time, Matt,

996
00:45:04,200 --> 00:45:06,879
Speaker 1: it is also an option of last resort. It's something

997
00:45:06,880 --> 00:45:10,040
Speaker 1: that we prefer people not to do, like, don't tap

998
00:45:10,120 --> 00:45:14,960
Speaker 1: those rath contributions if at all possible, because while they're accessible, yes,

999
00:45:15,239 --> 00:45:18,759
Speaker 1: in most circumstances, we prefer that folks pretend like they're not.

1000
00:45:19,239 --> 00:45:21,000
Speaker 1: Kind of you know, take a page out of Mr.

1001
00:45:21,080 --> 00:45:23,279
Speaker 1: Rogers and do some make believe and may make it

1002
00:45:23,280 --> 00:45:26,480
Speaker 1: seem like you can't actually take take advantage of those funds.

1003
00:45:26,480 --> 00:45:30,279
Speaker 1: But that's because Rath money is working for you in

1004
00:45:30,280 --> 00:45:34,360
Speaker 1: a particularly wonderful tax advantaged way. And since the ceiling

1005
00:45:34,719 --> 00:45:38,000
Speaker 1: on what you contribute is only six thousand dollars a year,

1006
00:45:38,760 --> 00:45:40,520
Speaker 1: and the fact that is that you'll never be able

1007
00:45:40,560 --> 00:45:43,080
Speaker 1: to to make up for those contributions that you missed.

1008
00:45:43,400 --> 00:45:45,560
Speaker 1: So if you pull money out, you can never put

1009
00:45:45,600 --> 00:45:48,919
Speaker 1: it back in. What's done is done, and you can't

1010
00:45:48,960 --> 00:45:52,920
Speaker 1: undo it exactly. So I know it's weird that it's

1011
00:45:52,920 --> 00:45:55,880
Speaker 1: one of our favorite parks is that this money is accessible,

1012
00:45:56,160 --> 00:45:58,200
Speaker 1: but we also don't want you to use it ever.

1013
00:45:58,800 --> 00:46:00,719
Speaker 1: But that's our stance, and so we think of it

1014
00:46:00,760 --> 00:46:02,920
Speaker 1: maybe kind of like what's written on the door of

1015
00:46:02,920 --> 00:46:06,080
Speaker 1: a fire extinguisher, break glass only in case of emergency.

1016
00:46:06,160 --> 00:46:09,560
Speaker 1: The same really is true with Rath dollars, like don't

1017
00:46:09,560 --> 00:46:13,000
Speaker 1: touch unless things are I think, really hitting the fan

1018
00:46:13,040 --> 00:46:14,400
Speaker 1: in your life. Yeah, it's kind of like going back

1019
00:46:14,400 --> 00:46:16,600
Speaker 1: to the pilot example with the other question we had,

1020
00:46:16,640 --> 00:46:18,839
Speaker 1: it's great that you've got a parachute under your seat.

1021
00:46:18,880 --> 00:46:20,399
Speaker 1: We hope you don't have to use it, but it's

1022
00:46:20,440 --> 00:46:21,920
Speaker 1: really great to know that it's there and that it's

1023
00:46:21,960 --> 00:46:24,600
Speaker 1: gonna work well in case you do need to use it. Uh.

1024
00:46:24,600 --> 00:46:26,480
Speaker 1: And so let's talk about how you can know your

1025
00:46:26,560 --> 00:46:29,680
Speaker 1: contribution amount, Chris, because the thing is you don't actually

1026
00:46:29,800 --> 00:46:31,359
Speaker 1: have to report to the I R S how much

1027
00:46:31,360 --> 00:46:34,400
Speaker 1: you're contributing each year. You certainly can, but there's no requirement.

1028
00:46:34,560 --> 00:46:36,480
Speaker 1: And that's because you fund a roth ira a with

1029
00:46:36,680 --> 00:46:39,879
Speaker 1: after tax dollars. And so the place that you'll want

1030
00:46:39,920 --> 00:46:42,560
Speaker 1: to turn to know how much you've actually contributed over

1031
00:46:42,600 --> 00:46:45,920
Speaker 1: the years is with your planned administrator. I know that

1032
00:46:46,000 --> 00:46:48,040
Speaker 1: when I log into my Vanguard account, I can see

1033
00:46:48,080 --> 00:46:51,399
Speaker 1: exactly how much I've contributed to my wrath, going back

1034
00:46:51,400 --> 00:46:54,160
Speaker 1: all the way to its inception. I can you can

1035
00:46:54,200 --> 00:46:56,520
Speaker 1: just kind of filter those options there. I can also

1036
00:46:56,560 --> 00:46:59,480
Speaker 1: see my complete distribution history as well if I select

1037
00:46:59,520 --> 00:47:02,080
Speaker 1: that option. So the best place to find that information

1038
00:47:02,120 --> 00:47:05,080
Speaker 1: is really you just log into your account and look

1039
00:47:05,080 --> 00:47:07,520
Speaker 1: it up there. It is error prone because you are

1040
00:47:07,640 --> 00:47:11,160
Speaker 1: kind of calculating it, Longhand, like you said, even when

1041
00:47:11,160 --> 00:47:13,759
Speaker 1: you look at the I r S transcripts, Uh, it's

1042
00:47:13,760 --> 00:47:16,239
Speaker 1: going to be error prone because you are still sort

1043
00:47:16,239 --> 00:47:18,920
Speaker 1: of adding it up, Longhand, you're still doing something manual.

1044
00:47:18,960 --> 00:47:21,560
Speaker 1: You're doing the math yourself. Yeah, but at a glance,

1045
00:47:21,680 --> 00:47:24,040
Speaker 1: you should be able to determine just how much in

1046
00:47:24,080 --> 00:47:27,719
Speaker 1: contribution dollars that you have access to. Yeah, so you're custodian,

1047
00:47:27,800 --> 00:47:31,040
Speaker 1: they should help you with the record keeping, even if

1048
00:47:31,120 --> 00:47:33,080
Speaker 1: it's a bit annoying. Right, since you have to piece

1049
00:47:33,080 --> 00:47:36,320
Speaker 1: it altogether yourself, they should have the numbers in store.

1050
00:47:36,360 --> 00:47:39,839
Speaker 1: So that you can perform that basic uh subtraction, right,

1051
00:47:39,840 --> 00:47:41,839
Speaker 1: And so yeah, you really don't need to worry about

1052
00:47:41,840 --> 00:47:43,919
Speaker 1: the I R S in this equation because there's nothing

1053
00:47:43,920 --> 00:47:47,000
Speaker 1: you need to submit either when you're making contributions or

1054
00:47:47,200 --> 00:47:50,839
Speaker 1: when you're making a qualified distribution. Pulling that money out

1055
00:47:51,000 --> 00:47:54,680
Speaker 1: that you've contributed falls within that category of a qualified distribution.

1056
00:47:54,960 --> 00:47:56,440
Speaker 1: And so that's nice to know, at least from a

1057
00:47:56,480 --> 00:47:59,200
Speaker 1: tax standpoint, that you don't really have to get anyone

1058
00:47:59,200 --> 00:48:01,799
Speaker 1: else involved. But we would say make sure you're being

1059
00:48:01,880 --> 00:48:05,320
Speaker 1: judicious before you make that withdraw, Chris, even if that money,

1060
00:48:05,560 --> 00:48:07,800
Speaker 1: even if you have access to it, this really should

1061
00:48:07,800 --> 00:48:09,960
Speaker 1: only be done if you're in like finances are on

1062
00:48:10,040 --> 00:48:12,560
Speaker 1: fire kind of scenario. You you don't want to be

1063
00:48:12,680 --> 00:48:16,479
Speaker 1: willy nilly pulling the pulling those contributions out, because over

1064
00:48:16,520 --> 00:48:18,719
Speaker 1: the decades they're going to do a whole lot of

1065
00:48:18,719 --> 00:48:22,240
Speaker 1: heavy lifting on your behalf, providing you a much greater

1066
00:48:22,760 --> 00:48:26,920
Speaker 1: tax free nest egg in your retirement years. That's right, Chris. Additionally,

1067
00:48:27,239 --> 00:48:29,200
Speaker 1: what you can do is just keep up with it yourself.

1068
00:48:29,719 --> 00:48:31,480
Speaker 1: That's what I do. I keep up with all of

1069
00:48:31,520 --> 00:48:34,359
Speaker 1: the contributions that make to any my retirement accounts within

1070
00:48:34,440 --> 00:48:37,920
Speaker 1: a spreadsheet. But again, uh, this is a long form

1071
00:48:38,000 --> 00:48:40,080
Speaker 1: way of doing it. There is the chance for there

1072
00:48:40,120 --> 00:48:41,840
Speaker 1: to be some errors, but the good news is that

1073
00:48:41,920 --> 00:48:44,279
Speaker 1: it does not take much work at all, and you

1074
00:48:44,360 --> 00:48:47,560
Speaker 1: always have a running total of your contributions. So that's

1075
00:48:47,560 --> 00:48:50,640
Speaker 1: an option you can consider as well. Joel, let's go

1076
00:48:50,640 --> 00:48:52,239
Speaker 1: ahead end this one. Let's get back to the beer

1077
00:48:52,320 --> 00:48:55,320
Speaker 1: for this episode. This was an Imperial stout. What is

1078
00:48:55,320 --> 00:48:58,400
Speaker 1: the name of this bear? Is it just strong dark ale? Think? So? Okay,

1079
00:48:58,440 --> 00:49:02,200
Speaker 1: I realized that it's kind of got minimal minimalist label

1080
00:49:02,280 --> 00:49:04,840
Speaker 1: here going how my Norwegians roll Matt, But yeah, what

1081
00:49:04,840 --> 00:49:06,759
Speaker 1: were your thoughts on this one? Okay? So I thought

1082
00:49:06,800 --> 00:49:09,320
Speaker 1: it was really good. It was roasty and chocolate e.

1083
00:49:09,400 --> 00:49:11,640
Speaker 1: It was a touch suite, but it had more of

1084
00:49:11,680 --> 00:49:14,040
Speaker 1: the dark chocolate vibes going on than the milk chocolate,

1085
00:49:14,239 --> 00:49:17,760
Speaker 1: which I'm always partial to. I actually think this brewery

1086
00:49:17,960 --> 00:49:21,800
Speaker 1: is one of the best European breweries out there. Yeah,

1087
00:49:21,800 --> 00:49:25,200
Speaker 1: I mean, well, I'm also just partial because they're my people.

1088
00:49:25,239 --> 00:49:28,239
Speaker 1: They're there. It's a Norwegian brewery, but I really like

1089
00:49:28,280 --> 00:49:30,359
Speaker 1: a lot of the beers I've had from them. There's

1090
00:49:30,360 --> 00:49:32,480
Speaker 1: a barley wine that I have fond memories of because

1091
00:49:32,480 --> 00:49:33,880
Speaker 1: of where I got to drink it when I was

1092
00:49:33,880 --> 00:49:36,200
Speaker 1: in That makes all the difference. Yeah, I'm pretty sure

1093
00:49:36,200 --> 00:49:37,680
Speaker 1: I've had some of their beers before, but I have

1094
00:49:37,760 --> 00:49:40,799
Speaker 1: not had the experience of gazing out upon a fjoor

1095
00:49:41,440 --> 00:49:43,360
Speaker 1: as I was drinking this amazing. If you do, you'll

1096
00:49:43,360 --> 00:49:45,799
Speaker 1: give it an extra two stars and you claim you're

1097
00:49:46,120 --> 00:49:49,520
Speaker 1: Nneya or whatever day and I'll take over the cantio

1098
00:49:49,520 --> 00:49:52,399
Speaker 1: in spot there. Okay, well this definitely no. I will

1099
00:49:52,440 --> 00:49:55,600
Speaker 1: say this is not cantion level, But Canton also doesn't

1100
00:49:55,640 --> 00:49:58,319
Speaker 1: make stounts, so this is uh, this is a really

1101
00:49:58,360 --> 00:50:01,800
Speaker 1: good version of a we can stout. I enjoyed it.

1102
00:50:01,800 --> 00:50:05,080
Speaker 1: It's very it's very classic, and it's stout like nature.

1103
00:50:05,400 --> 00:50:07,800
Speaker 1: It's well balanced, and I thought it was pretty tasty.

1104
00:50:07,840 --> 00:50:09,680
Speaker 1: That's right. This is another example of one of those

1105
00:50:09,719 --> 00:50:11,200
Speaker 1: types of beers that you would never have in the

1106
00:50:11,239 --> 00:50:13,320
Speaker 1: middle of summer, but here we are enjoying it. But

1107
00:50:13,360 --> 00:50:15,920
Speaker 1: I'm glad that you and I got to share this one. Today.

1108
00:50:16,239 --> 00:50:18,600
Speaker 1: Listeners can head to how do Money dot Com, where

1109
00:50:18,640 --> 00:50:20,640
Speaker 1: you can find some of the different resources that we

1110
00:50:20,680 --> 00:50:23,200
Speaker 1: may have mentioned during this episode, and Joel that's going

1111
00:50:23,280 --> 00:50:25,160
Speaker 1: to be it for this one buddy. Until next time,

1112
00:50:25,320 --> 00:50:27,359
Speaker 1: best friends out, best Friends Out,